MuniAuction, the Pittsburgh-based Internet company that pioneered electronic bond auctions, received a patent on its popular method of selling new bond issues.

MuniAuction, the Pittsburgh-based Internet company that pioneered electronic bond auctions, received a patent on its popular method of selling new bond issues. On December 12, 2000 the US Patent and Trademark Office issued a patent to MuniAuction, giving the firm exclusive rights to conduct (or license its method of conducting) bond auctions and investment solicitations that have the following five characteristics:

1) An Issuer of securities, 2) selling or purchasing fixed income instruments over an electronic network, 3) using an auction (or "competitive sale") format, 4) with software that performs an interest cost calculation, 5) employing a web browser for inputing, computing, submitting, or displaying data.

MuniAuction conducted the first Internet auction of a new bond issue for the City of Pittsburgh in November 1997. Since then, the firm has conducted over 1,100 auctions exceeding $1.1 trillion in volume. "We are gratified that after 4 years and substantial expense, we have finally obtained legal protection for our invention," said Myles Harrington, President and Co-Founder of MuniAuction. "Others have copied our methodology and used their practically unlimited financial resources to offer it for free; now, we can at least collect licensing fees or else stop infringement," he added.

MuniAuction is currently using the patented methodology for sales of new bond and note issues as well as for solicitations of jumbo CDs and flex repurchase agreements. "We expect licensing fees to become a substantial source of revenues for MuniAuction, since our method of auctioning fixed income financial instruments will become increasingly popular as fixed income markets migrate to the Internet," Mr. Harrington noted. This month, the firm will change its name to reflect completion of its transition from an auction service for new issues of municipal bonds to an ASP (application service provider) that both hosts auctions of financial instruments and develops customized software to support institutional sales and administration of fixed income financial instruments.

On December 6, 2000, the State of Texas hosted its first auction for jumbo CDs over the Internet. Texas Comptroller Carole Keeton Rylander said $70 million in certificates of deposit were awarded to 42 banks, credit unions and savings and loans at an average interest rate of 6.19 percent.

On December 6, 2000, the State of Texas hosted its first auction for jumbo CDs over the Internet. Texas Comptroller Carole Keeton Rylander said $70 million in certificates of deposit were awarded to 42 banks, credit unions and savings and loans at an average interest rate of 6.19 percent.

Texas joined the states of Ohio and South Carolina in creating a private-label web site (www.BidTX.com) for the placement of time deposits. On a monthly basis, the Texas Comptroller will purchase $70 million in CDs from Texas depositories offering the highest interest rates. This new program, BidTX, will ensure fairness and improve competitiveness in the placements of these funds.

Inflow Improves Internet Reliability, Security of Live Auction Web Site

DENVER and PITTSBURGH, Dec. 5 -- InFlow, Inc., a national leader in first class data centers and managed services, was chosen by MuniAuction to provide quality colocation with 24x7x365 onsite customer service.

Inflow Improves Internet Reliability, Security of Live Auction Web Site

DENVER and PITTSBURGH, Dec. 5 -- InFlow, Inc., a national leader in first class data centers and managed services, was chosen by MuniAuction to provide quality colocation with 24x7x365 onsite customer service. Focused on real-time Internet auctions, MuniAuction has installed its production servers in Inflow's Pittsburgh DNX (Data Network Exchange) facility. MuniAuction will utilize Inflow's managed services including InflowNet(TM) and SecureFlow(TM) to enhance its real-time auctions and customer transaction security.

After careful evaluation of Inflow's facilities, services and consultation with our clients, we were convinced that Inflow is uniquely qualified to be our colocation facility,'' said Myles Harrington, MuniAuction's president.

For a company that conducts live auctions on the Web, Internet uptime is a must,'' said Bill Wosilius, Inflow's Pittsburgh general manager. MuniAuction needed an infrastructure that would grow with the company and Inflow matched their core values and requirements for reliability, security and network performance.''

MuniAuction conducts $20 billion in Internet auctions every week for two of the largest bond issuers in the world, Freddie Mac and Federal Home Loan Banks, in addition to serving many of the largest municipal bond issuers in the country. MuniAuction's site is now backed by Inflow's security and network managed services to provide continuous Internet access needed for live auctions, financial transactions and future international businesses.

Inflow's InflowNet service provides high Internet redundant access and performance through its multiple Tier-1 ISP network. SecureFlow, Inflow's managed firewall service, prevents unauthorized crossing of network perimeters and deters the latest attacks. These services combined enhance MuniAuction's end-user experience and safeguard the operations of its online auctions.

MuniAuction joins Inflow's growing customer base that includes MapQuest, AtHome Corporation, Headhunter.net, RedHat, randmcnally.com and others. In 2000, the number of Inflow customers has grown from 60 to more than 340. To support the increase in business, Inflow has expanded its DNX (Data Network Exchange) facilities from three to 15 and its staff from 107 to more than 590 company-wide.

About MuniAuction

MuniAuction is the country's first web site for auctions of fixed income securities and in particular, municipal bonds and agency discount notes. MuniAuction serves bond issuers, institutional investors, and municipal treasurers by hosting Internet auctions for the sale of bonds and for the purchase of money market instruments. In addition to developing customized auction software for institutional sales of fixed income securities and treasury investment products, MuniAuction provides on-going auction hosting and support services to debt issuers, institutional investors, underwriters and financial consultants. Since November 1997, MuniAuction has hosted more than 560 Internet auctions of fixed income securities totaling more than $1 trillion. MuniAuction, which has 35 employees, is headquartered in Pittsburgh, Pennsylvania and has a branch office in the San Francisco Bay Area.

More information on MuniAuction is available at www.muniauction.com, or by calling 412-391-7686.

About Inflow

Inflow is a leader in first class data centers and managed services, designed for mission critical e-businesses. The company guarantees 100 percent uptime in Internet access through multiple Tier 1 service-provider networks. Inflow's cost effective services, certified engineers and first rate customer service allows companies to focus on their core business and outsource their back-office IT departments.

Inflow, with headquarters in Denver, Colorado, owns and operates 15 Internet data centers in emerging technology cities nationwide. The company plans to open six additional sites within the next six months, including its first international facility in Dublin, Ireland. For additional information and data center locations, please visit www.inflow.com or call 877-321-2464. For investor inquiries, please contact Whitney Fogt at 303-942-2840.

PITTSBURGH, PA (November 14, 2000) MuniAuction, the Pittsburgh-based firm that pioneered Internet auctions of new bond issues conducted an auction today that pushed the company's total volume over $1 trillion.

PITTSBURGH, PA (November 14, 2000) MuniAuction, the Pittsburgh-based firm that pioneered Internet auctions of new bond issues conducted an auction today that pushed the company's total volume over $1 trillion. Three years ago, MuniAuction conducted the first Internet auction of a new bond issue in a controversial $70 million sale for the City of Pittsburgh. Several of the major Wall Street bond underwriters, including Merrill Lynch and Goldman Sachs, opposed the sale because of innovations in the bidding process that were intended to increase competition by increasing the number of bidders.

Since that first sale in November 1997, the volume of electronic municipal bond sales has exploded. Year-to-date, 14% of all competitive municipal bond sales have been conducted electronically. With the exception of two recent sales by Dow Chemical and Deutsche Bank, the corporate bond market has not adopted electronic bidding for new issues. However, federal agency issuers like Freddie Mac and Federal Home Loan Banks have adopted the new Internet auction methodology offering nearly $20 billion of discount notes every week. Both Agencies use "private label" web sites created and hosted by MuniAuction, who also acts as auction administrator.

"This $1 trillion milestone makes MuniAuction one of the three largest Internet commerce companies in existence," said Myles Harrington, President and Co-Founder of MuniAuction. "We anticipate an additional $1.5 trillion of auction volume in 2001," he added.

Because profit margins are so thin for auctions of fixed-income securities, MuniAuction has diversified into software development and application-hosting services for financial institutions engaged in fixed-income securities trading and bond administration services. As a result, the company will change its name in January. "Based upon the size and quality of the financial institutions who have recently engaged us to develop customized bond auction and debt administration tools for them, we foresee spectacular growth opportunities for MuniAuction in this new area," Harrington said.

More information on MuniAuction is available at www.MuniAuction.com, or by calling 412-391-7686.

from The Bond Buyer - Dallas, TX (August 15, 2000)

by Darrell Preston

Kirkpatrick Pettis' Denver office is establishing an electronic underwriting presence in an effort to give Colorado issuers - that traditionally favor negotiated deals - another format for doing competitive bond sales.

from The Bond Buyer - Dallas, TX (August 15, 2000)

by Darrell Preston

Kirkpatrick Pettis' Denver office is establishing an electronic underwriting presence in an effort to give Colorado issuers - that traditionally favor negotiated deals - another format for doing competitive bond sales.

The Omaha-based firm, which launched its electronic commerce effort this summer by hiring two bankers from Bigelow & Co., is planning its first public demonstration of its new system today when it sells about $57 million of bonds for the Arapahoe County Building Corp. The bonds will be sold over the company's Web site, www.kpauction.com, which will allow bidders to adjust their bids during the auction.

Unlike many new online ventures in the municipal bond business, Kirkpatrick is taking the unusual approach of inviting the local news media to watch its first sale because the firm hopes to demonstrate to the public that Arapahoe County can improve efficiency and reduce costs by selling bonds over the Internet. The bonds will be used to finance new county administrative offices and office space to house the sheriff and coroner.

Kirkpatrick made the case in its media invitation that county taxpayers would benefit from any savings from selling bonds on its site.

"We invited all the local newspapers because we wanted people to know about this," said Chris Blackwood, senior vice president and director of e-commerce at Kirkpatrick.

In some ways the sale marks a departure from the approach of Denver's underwriting community, which has generally pushed for negotiated sales for most types of debt. In Colorado, a competitive sale is as rare as a snowstorm in July, and nearly every deal is sold through negotiation, with the exception being some bonds sold for the city of Denver.

But in recent years, some vocal opponents of the status quo for negotiated sales have sparked a public debate on whether some issuers, especially public school districts selling insured general obligation debt, would be better served through competitive sales.

While little has changed in terms of the exclusive use of negotiated sales, Blackwood said that he hopes that the new e-commerce venture can encourage more issuers to consider the method of sale and give Kirkpatrick a boost.

"I think this will help move [the firm] up in the rankings," he said. Kirkpatrick Pettis has traditionally ranked about 50th in underwriting, handling $468.3 million of deals last year that made it the country's 55th largest underwriter. Blackwood said that Kirkpatrick's goal is to auction $200 million of bonds during the next year through its Web site. The firm also is developing a Web presence to sell its own inventory on the secondary market.

Blackwood said that he expects to see more public school districts seek competitive sales in coming years, in part because so many of them have strong credit histories, insurance, and the strength of the state's intercept program for guaranteeing payment on school debt.

"It's becoming more and more difficult to argue that a negotiated structure is best," he said. "There's no doubt in my mind that there is more and more public pressure on this issue. You hear it being discussed more and more by issuers. You just can't stop it."

Blackwood, who has been pursuing an advanced degree in e-commerce technology and management, jumped ship to Kirkpatrick from Bigelow, where he was an economist, in June, along with Russell Caldwell, an investment banker.

In January, Bigelow launched its own private-label auction site, www.bigelowauction.com, and handled a competitive sale of $38.7 million of open-space sales and tax use bonds for Boulder County. Bigelow's Boulder County deal was powered by MuniAuction Inc.'s software, making Bigelow the first broker-dealer in the country to host an Internet- exclusive auction on a private-label Web site, according to MuniAuction.

Blackwood said that MuniAuction also is powering Kirkpatrick's site.

But Blackwood said Kirkpatrick is adding a unique twist to its new-issue auction site because rather than waiting until the last minute to submit one bid and waiting for the results, bidders will actually be able to adjust their bids throughout the sale process.

Other competitive sites, Blackwood said, do not offer follow-up bidding. During the bidding, bidders are informed of their own rank but not the rank of other bidders.

"We're going to allow bidders to see their rank order, because if you put more information in their hands it becomes more like a live auction," Blackwood said. "This will be new, because most of those who have been in the business aren't used to adjusting their bids. But what we want is more bidders making more adjustments."

From the Centre Daily Times - State College, PA (July 9, 2000)

by Stephenie Steitzer

Pittsburgh, PA (July 9, 2000) The borough of State College, Pennsylvania is jumping on the Internet ship in an effort to stay afloat in today's fast-paced electronic world.

Pittsburgh, PA (July 9, 2000) The borough of State College, Pennsylvania is jumping on the Internet ship in an effort to stay afloat in today's fast-paced electronic world.

On Monday afternoon, borough council will accept bids via the Internet for the sale of bonds to pay for the new municipal building.

"I think there's just no way to put off stepping into that electronic ocean of opportunity," said council member Jean McManis, who said she recently purchased a Dell laptop computer to keep up with other council members.

From 11:30 a.m. to noon Monday, the borough's financial adviser will be online at www.muniauction.com to accept bids for the sale of $8 million worth of bonds to pay for the construction of the three-story building in the 200 block of South Allen Street.

Council will then hold a special meeting at 4 p.m. to authorize the sale of the General Obligation Bonds, Series 2000, to the highest bidder.

Michael Groff, borough finance director, said the advantage of Internet bidding is that it allows for people to bid against each other, rather than just submit sealed bids. Groff and McManis said they believe doing so will lead to lower interest rates for the payback over the next 25 years.

"We think this will be a very positive bid for the borough and taxpayers because it's just a more competitive environment," he said.

The total projected cost of the building is about $10.2 million, which includes construction, landscaping, furnishing and soil, concrete and welding testing. In May, council awarded bids totaling $8.38 million to the following firms:

• General Contractor: Leonard S. Fiore Inc., $6.08 million
• Plumbing: D.C. Goodman & Sons Inc., $511,130
• Mechanical: Maddens Inc., $868,300
• Electrical: Stelco Inc., $924,450

Council member Tom Daubert said the borough has the remaining money to pay for the building in savings.

Although the borough has some other outstanding debts in the general funds in the $1 million range and some others in the parking authority for several million that at most, taxpayers might see an $8-to-$10 increase in property taxes.

"I would expect it won't affect taxes at all," said Daubert, adding that the borough has a borrowing limit of about $40 million. "If it does, it will be very minimal."

Daubert said that demolition at the building site is complete and that construction of the building is scheduled to start July 17. The projected completion date is October 2001.

Successful Sale Totals Over $2.4 billion

Pittsburgh, PA (January 11, 2000) The Federal Home Loan Bank System, the nation's largest source of home mortgage credit, today launched their first ever competitive discount note auction over the internet. Using a customized platform created by AgencyAuction, a unit of MuniAuction, Inc., the 15 member Selling Group today agreed to purchase $2.45 billion in discount notes in four different maturities. The results of this auction are shown below:

Successful Sale Totals Over $2.4 billion

Pittsburgh, PA (January 11, 2000) The Federal Home Loan Bank System, the nation's largest source of home mortgage credit, today launched their first ever competitive discount note auction over the internet. Using a customized platform created by AgencyAuction, a unit of MuniAuction, Inc., the 15 member Selling Group today agreed to purchase $2.45 billion in discount notes in four different maturities. The results of this auction are shown below:

Participation in this auction was strong, with all members of the Selling Group submitting substantial bids. AgencyAuction functioned well, as expected, after extensive testing. For this auction, 187 separate bids were submitted totaling 8.2 times the amount offered for sale for the four available maturities. These bids were confirmed and the auction was executed at 12:00 noon, on schedule. The winning bids were calculated and the appropriate dealers were notified in minutes, eliminating the tedious series of phone calls that were formerly necessary, and providing the market with more timely information. Dealer reaction was positive. "The Home Loan's first internet auction went extremely smoothly" said Robin Taylor, Senior Vice President at PaineWebber, and a participant in today's auction. "It was because of all the practice the dealers were given, and the attention to detail".

FHLBanks have a long history of leadership in using discount note issuance to fund member loan demand. In 1995, the FHLBank System was the first Government Sponsored Enterprise (GSE) to issue discount notes via auction, and since then has been the largest, most consistent GSE DN issuer. In 1999, 60% of FHLBank term DNs were offered via auction, with these four maturities totaling over $328 billion, in more than 4,500 separate transactions.

These documents, along with details of auction results, can be viewed on the Office of Finance web site www.fhlb-of.com, both in the Main Menu and under "News and Analysis". The FHLBank Discount Note Program represents an important source of funding used by the Federal Home Loan Bank System members for housing and economic development.

Oregon Housing and Community Services Department conducted a GIC auction on the MuniAuction platform on November 14, 2000 for $35 million in public funds.

Oregon Housing and Community Services Department conducted a GIC auction on the MuniAuction platform on November 14, 2000 for $35 million in public funds. MuniAuction has acted as agent for 22 previous GICs totaling $1.2 billion in par value. Others using the MuniAuction platform have included Alaska Housing Finance Corporation, Massachusetts Water Resource Authority, Oklahoma Housing Finance Agency, Clark County (NV) and the City of Oakland (CA).