Treasury Uses the Internet to Sell $24.6 Million in CDs
Competition Was Key to State's Second Successful Online Auction
Contact: Sarah Mulhearn, Communications Director at 225-342-0012
BATON ROUGE-The Louisiana Department of the Treasury went online to accept competitive bids on $24.6 million worth of certificates of deposit, resulting in increased earnings for the state, according to State Treasurer John Kennedy.
"Participation almost doubled what we had during our first auction three months ago, and we bid out almost twice the amount of CDs," said Treasurer Kennedy. "This is good news for future auctions, and we expect even better results for our next one in October."
The Treasury awarded CDs to 13 banks with the highest bids using BidLouisiana, an electronic auction house similar to commercial auction Web sites. Each bid included the amount of money a bank wanted and the interest rate it was willing to pay. The minimum interest rate was 3.61 percent, but competition drove the rate up to 3.64 percent, resulting in over $3,300 in increased earnings for the state.
"BidLouisiana is beneficial for both the state and Louisiana banks," said Treasurer Kennedy. "The state benefits from a better rate of return on its deposits. Banks benefit from an increased availability of CDs and from BidLouisiana's convenience. The Web site enables banks to place bids in a matter of seconds and right up to the end of the auction."
By law, the Treasury may place for competitive bidding up to 20% of state funds determined available for CD investment, and will continue to conduct online auctions on the third Tuesday in January, April, July and October. For more information, visit www.BidLouisiana.com, or contact 225-342-7004 or 225-342-0013.
BidLouisiana is administered by the Grant Street Group, parent of MuniAuction, Inc.
Go to: BidLouisiana Home Page
Please direct questions and comments regarding bidding procedures to the Auction Administrator or call (412) 391-7686.