Zions Direct announces its first auction of secondary market municipal bonds. The auction will begin Monday, April 20, and will run for eight days. This innovative approach to selling municipal bonds allows retail and institutional investors to set the yield through a competitive bidding process. This is in contrast to the typical approach in which a broker/dealer sets the offering yield.
David Hemingway, Chairman of Zions Direct, remarked, “With the addition of municipal bonds on Zions Direct’s auction platform, we are providing individual investors another element of control in a volatile market. Our simple, transparent and affordable access to bonds allows our customers to easily review and purchase bonds without the traditional commissions associated with brokers and third party financial advisors.”
In this first auction, Zions will sell $45,000 face value of Manatee County, Florida Public Utilities Revenue Improvement bonds using an auction process similar to the US Treasury’s. An advantage to the Zions Direct platform is that bidders are able to see the market clearing price and receive instant feedback telling them if they are in a winning position (all winning bidders will pay the market clearing price).
In order to participate in this auction, bidders must have a Zions Direct account.
It is expected that municipal bond auctions will be an ongoing and welcome addition to our auction platform. To learn more about some of the unique features of municipal bonds, including possible tax advantages, please check out our previously posted article.
Zions Direct has conducted over 600 auctions during a three-year period. To view current municipal and other auctions, go to auctions.zionsdirect.com.
Potential investors should check the auction site for more information regarding these bonds before making an investment decision.
*Artwork from felixe under Creative Commons license at Flickr.com.
i would like to bid