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Contact: Leah Szarek, Director of Communications
202-838-1500
lszarek@msrb.org

MSRB PUBLISHES RESEARCH FINDINGS ON COMPETITIVE BIDDING ACTIVITY IN THE MUNICIPAL SECURITIES PRIMARY OFFERING MARKET

Washington, DC – The Municipal Securities Rulemaking Board (MSRB) today published research findings on the pricing benefits of increased competitive bidding activity in the municipal securities market. MSRB Chief Economist Simon Wu will present these findings at the Brookings Institution’s 9th Annual Municipal Finance Conference on Monday, July 13 at 3:45 p.m. ET.

“Given the scant research on this matter to date, we aimed to explore if higher numbers of competitive bids lead to better pricing terms for issuers,” said Wu. “Our findings confirmed our expectations. We found that as competitive bidding activity increased, the primary offering spread of the winning bidder declined. In other words, the more competitive bids an issuer received during the primary offering process, the more favorable their selling price and yield cost tended to be.”

The MSRB examined the competitive bidding activity in the municipal securities market during the primary offering process over the 10-year period from 2009 through the first half of 2019. The MSRB found that the average number of competitive bids received gradually increased over the past 10 years, from an average of 4.4 competitive bids per issuance in 2009 to an average of 5.7 competitive bids per issuance in the first half of 2019, and that the winning bidder’s primary offering spread was negatively correlated with number of bids received.


Read the paper.

The MSRB evaluates municipal market trends as part of its mission to promote a fair and efficient market. Access additional market data publications from the MSRB.

 

 

The Municipal Securities Rulemaking Board (MSRB) was established by Congress in 1975 with the mission to protect investors, issuers and the public interest and to promote efficiency, competition and capital formation. MSRB is a private, self-regulatory organization governed by an independent board of directors with market knowledge and expertise. MSRB does not receive federal appropriations and is funded primarily through fees paid by regulated entities. MSRB is overseen by Congress and the Securities and Exchange Commission.

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