SAN FRANCISCO, Feb. 22, 2011 /PRNewswire/ -- MuniMarket.com offers needed assistance to investors trying to successfully navigate a municipal bond market severely impacted by the fiscal crisis affecting state and local governments throughout the United States. The site, the first exchange platform for municipal market bid-wanteds, provides a free, easy-to-use, online solution for bondholders needing a bid-connect with investors wanting to bid.
MuniMarket.com founder Kevin Olson created the site as a public service to allow investors to get the best price by avoiding broker, dealer and trader spreads. Olson, a well-known investor advocate and public-finance watchdog, who pioneered fixed-income price transparency over a decade ago, refers to the site as "eBay for the muni markets." The Securities and Exchange Commission (SEC) has taken a "no-action" position on MuniMarket.com.
With so many investors looking to sell their municipal bonds under extraordinarily difficult market conditions, the bid-side of the equation is particularly bad for sellers. "One of the fundamental problems with the muni markets is that the bid-side is captive and closed," Olson said. "Your bonds are held at a dealer securities account. If you want or need to sell, you get one bid from your broker. That bid may be your broker's bid, or your broker's trading desk could have gone out and gotten another bid and kept a nice spread for itself. There may be a few layers of bids and spreads before a final buyer is found. The result is neither seller nor buyer gets the best prices. Unfortunately this is common practice."
To use MuniMarket.com, investors simply post the municipal bonds they want to sell and their contact information on the form provided by the site. At the end of the bidding period, the investor (or his broker, where bonds are held in account) and the winning bidder's broker will write the trade tickets.
Olson has also launched a public finance watchdog and investor advocacy Web site, MuniAdvocate.com, with the goal of improving municipal public finance and helping municipal market investors.