In an effort to adapt to the changing market, Pittsburgh-based electronic financial service provider Grant Street Group has expanded its existing product line by unveiling a new electronic auction platform for issuers and bidders of taxable Build America Bonds that are sold competitively.
Bidders will have the ability to submit their strongest all-or-none bid by designating each maturity as either BABs or tax-exempt bonds, according to a press release last week from the firm.
Issuers will be able to choose from three different methods for completing their competitive BAB sales, including allowing bids for BABs only, giving underwriters the option of submitting either a BAB bid or tax-exempt bid, or allowing underwriters to select a combination of taxable BABs or tax-exempt bonds on a per-maturity basis.
The new platform will also give issuers and financial advisers the ability to convert the taxable BAB bids to factor in the 35% federal subsidy and compare the ultimate interest costs associated with each underwriter's bid.
The application is included on MuniAuction as well as other private-label Web sites offered through Grant Street. With the firm's new platform, the financial software provider joins other market participants that have also adapted their systems to accommodate the nearly $30 billion of BABs in the municipal market since April.
Ipreo, a global financial data gatherer and software solution provider, altered its new issuance and data services in the spring with features that allow users to more easily structure BABs, such as allowing for them on certain maturities and gathering BAB information as part of its regular collection of municipal data for clients' use.
TheMuniCenter LLC - which offers an electronic fixed-income trading, analytics, and voice brokerage service platform - in May added its own proprietary application from its own screen to make it easier for financial advisers and brokers to identify and access BABs as they enter the market on a new-issue basis.
Electronic provider BondDesk Group LLC also implemented its software back in July so that traders could easily flag and search for BABs.