Explain the concept of bond reoffering.

Explain the concept of bond reoffering.

Bond reoffering refers to the process in which an investment bank or underwriter purchases bonds from an issuer and then resells them to investors at a higher price. The difference between the purchase price and the resale price represents the underwriting spread or profit for the investment bank. This process allows the issuer to raise capital by selling bonds to a wider range of investors, while the investment bank assumes the risk of reselling the bonds at a profit. Bond reoffering is commonly used in the primary bond market to facilitate the issuance and distribution of bonds.