From The Bond Buyer – New York, NY (November 20, 1998)
by Rober Whalen
Maturity-by-maturity bidding was offered over the Internet in New York for the first time when the Albany County Airport Authority sold two series of revenue bonds through the MuniAuction Inc. bidding system.
But for the second time in three MuniAuction sales, there were insufficient maturity bids submitted to calculate an overall true interest cost, and both series were captured by traditionally crafted all-or-none bids.
The syndicate led by Fleet Securities Inc. picked up the $17.8 million portion of the deal with a 4.955% true interest cost bid, while the other all-or-none syndicate — led by Roosevelt & Cross Inc. — submitted a bid that carried a 4.966% TIC. Prager, McCarthy & Sealy was the sole maturity-by-maturity bidder, unsuccessfully chasing seven of the 10 maturities.
The syndicates swapped roles on the $11.8 million alternative minimum tax piece, with Roosevelt & Cross winning the bonds with a 4.423% TIC bid. Pryor, McClendon, Counts & Co. was the only maturity bidder, sending in bids for two maturities.
During Tennessee’s $67 million issue earlier this month, maturity bidders also failed to fill the room and the deal was won by a strong bid from Merrill Lynch & Co.
MuniAuction president Myles Harrington said that he wasn’t concerned by the way things played out because his bottom line was met — ending the day with a satisfied client.
According to J. Dwight Hadley, the airport authority’s chief financial officer, the deal went “extremely well” and he wasn’t disappointed there were not sufficient maturity-by-maturity bids.
“I think if it had been a larger issue there may have been more bids by maturity. Being two relatively small issues, I didn’t really expect too many [maturity bids],” Hadley said. Selling the deal through the Internet- based system cost the authority $12,500, he added.
“We’re happy with the prices we got. There are traditional accounts in New York, and we expected the Roosevelts and the Fleets to be there,” said Guy Nagahama, a vice president with the authority’s financial adviser, First Albany Corp. “As far as the maturity-by-maturities, we opened it up as an option and got some people expressing some interest that they otherwise would not have been able to. All in all, they’re pretty happy with their deal.”