A private equity firm has won an auction for a company in a leveraged buyout $($LBO$)$ and is now syndicating a loan to finance the transaction. Which of the following accurately describes the book$-$building process for this loan?

The arranger collects commitments from investors, with amounts tiered by spread, before making a decision on where to price the loan.

The arranger prepares a fixed spread for the loan, then launches it to market for investors to bid on$.$

The arranger conducts an auction, setting a price based on bids from potential investors.

The arranger prices the loan after a thorough analysis of the borrower's financial model, without considering investor demand.