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What is the difference between buying municipal bonds in the primary and secondary market?

April 26, 2017buying market municipal bonds primary Secondary

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What is the difference between buying municipal bonds in the primary and secondary market?

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When the State sells a bond, it is referred to as a new issue primary market sale. In a new issue, all of the terms are set, including the price and interest rates, and the securities are sold to investors, with the issuer receiving the proceeds of the sale. The initial sales commission paid to broker-dealers is paid by the issuer, such as the State of Oregon, from the proceeds. A retail investor who would like to participate in a primary market transaction must have an account with a brokerage firm serving as a manager or selling group member for the sale.