I am interested in Debt Capital Markets but I am struggling to understand how bonds, particularly corporate bonds, are priced initially. I know that a company will tap an investment bank as book runner to place a bond on the market.
Does the book runner take the bond onto its books, i.e. does it initially underwrite the bond? And only then does it place the bond on the market?
Further, once the bond is placed onto the market, I know that the potential lenders will send bids regarding ticket size, but will the interest rate be included? Once all bidders have submitted, how is the interest rate of the bond determined? And furthermore, is the bond always issued at par? Or is the coupon always initially determined, and then adjusted. So many questions. I realize Quantitative Finance may not be the correct forum, but I would be extremely grateful if someone could answer my questions.