New Jersey's recent ban on negotiated underwritings has resulted in an unexpected and dramatic fringe benefit - bond attorneys and financial advisers have begun offering their services to the state at fire-sale prices.

According to a review of recent state bond issues, attorneys and advisers have slashed their prices by more than half, and in many cases by as much as two-thirds, since Gov. Jim Florio's executive order in May requiring the state and its authorities to use competitive bids for most underwritings. Several bond attorneys said their recent bids do not even cover costs, and said they may have to start trimming staffs if the cutthroat pricing climate does not abate soon. They said bids are coming in so low because firms are afraid the state is basing its selections almost entirely on price, and they want to make sure they retain at least a piece of the pie.

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