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The borrower has specified how much it wants to pay back in face value in each of a number of future maturity years.
The bond underwriter wants to choose an interest rate(or coupon payment) for each maturity given that
a) borrower has restricted number of distinct interest rates allowed,
b) underwriter knows the market price at which he can resell a bond of a given maturity and interest rate,
i) underwriter makes a reasonable profit on the resale,
ii) the bid is attractive to the borrower in terms of low interest rates and amount of money he receives initially.