This week Nassau County, NY utilized their financial advisor's PFMauction website - a competitive auction platform created by Grant Street Group to issue $120 Million in Tax Anticipation Notes. In separate auctions for two series of notes -- Series A and B -- bids were received during 30 minute open auctions. During the auctions, bidders were shown their bid status (i.e., "In the Money" or "Out of the Money") and were able to subsequently improve their bids based upon this real-time feedback.
As a convenience to bidders, the County permitted partial bidding - allowing bids in $1M increments with a minimum bid of $5M which allowed more underwriters, including local and regional underwriters, to compete for the County's notes and, hence, achieve more competitive rates. The County also utilized the Two Minute Rule (TMR), which extended the auctions for an additional two minutes any time the lead changed during the final two minutes of the auctions.
During the auctions, participants were able to toggle, via a simple button, between the two Series'. The $103M Series A sale received 76 bids from 15 bidders and triggered two TMR extensions resulting in three different winning firms and a weighted average NIC of 3.2752%, while the $17M Series B sale received 12 bids from 8 bidders resulting in a weighted average NIC of 3.3204%
Since 1999, Public Financial Management has conducted 655 auctions for over $8.7 Billion to-date on its private-label auction website (www.PFMauction.com).