What does the concession refer to in a selling group transaction?

In a selling group transaction, the term "concession" specifically refers to the difference between the takedown and the additional takedown. When a bond is sold through a selling group, the takedown is the initial portion of the proceeds that the selling group receives from the total offering price. On the other hand, the additional takedown is an extra amount that may be granted under specific circumstances, such as when sales reach a certain threshold. The concession thus represents the incentive for the selling group to promote the sale of the bonds, allowing them to earn a portion of the overall gross spread. Understanding this concept is crucial for grasping how pricing and commissions work in the context of municipal or corporate bond offerings.