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” websites 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.