Westchester County last week completed its first competitive deal under a pilot program that allows it to sell bonds using only an Internet auction platform.
The triple-A rated county priced $173.2 million of general obligation bonds and sewer bonds via Ipreo’s Parity electronic bid system on Feb. 10. The transaction was the first in a three-year pilot program that could spread to the rest of the state if the practice is deemed successful.
With the exception of Westchester, New York State law governing local finance require municipalities to accept paper bids on competitive bond deals. Some other municipalities in the state already accept electronic bids but have to accept paper bids as well.
Westchester is required to report its results to the state comptroller’s office, which will make recommendations to the state at the end of the pilot program.
“Selling our bonds via an Internet auction was a first for the county government,” County Executive Robert Astorino said in a statement. “But it was a great success. We attracted more bidders than we might have otherwise and at favorable rates that save taxpayer money.”
Barclays Capital beat out seven other bidders on the largest tranche, $121.9 million of tax-exempt GOs.
The longest maturity in 2022 yielded 3.04%, three basis points lower than the Municipal Market Data municipal index for triple-A, 12-year bonds.
Hutchinson, Shockey, Erley & Co beat out three other bidders for $23.1 million of taxable Build America Bonds. The longest maturity, 30 years, yielded 5.8%, 115 basis points above the closing price for 30-year Treasuries.
