When expressed as a yield, the interest rates governments receive are the sum of the underwriter compensation and the rate the investor gets paid (called the reoffering yield), as follows (Sorensen, 1979):
True Interest Cost = underwriter compensation + reoffering yield
Underwriters have some control over both the reoffering yield and their compensation.
Interest cost to issuers is the sum of the underwriter spread plus the reoffering yield (Sorensen, 1979).
underwriters in setting reoffering yields above market
If so, the underwriters' ability to exercise monopolistic powers in setting reoffering yields may be diminished.