Women-owned and minority-owned firms structured and sold derivatives on Tuesday's $410 million New York City issue, marking another first for the derivatives market.

Pryor, McClendon, Counts & Co. sold $14.6 million of inverse floating rate notes, while Artemis Capital Group sold $11.9 million of indexed inverse floating rate notes.

"This type of transaction provides new opportunities for us," said Robin Wiessmann, a principal at Artemis. Artemis served as co-manager on an earlier issue of floating rate and inverse floating rate notes, but the transaction was structured by another firm.

Women and minority-owned firms have been making slow inroads into the derivatives area. In June, for example, Connecticut appointed Innova Securities, a Boston-based minority-owned firm, to arrange a swap for the state with Lehman Brothers.

On the New York City issue, the Artemis notes pay investors a floating rate that goes up as the rate on the JJ Kenny Index falls. The notes are leveraged to exaggerate the impact of changing rates.

The city locked in a synthetic fixed-rate and offset its exposure to the rate on the notes by entering a seven-year interest rate swap agreement with Sumitomo Bank Ltd., arranged by Artemis. After seven years, the notes convert to a predetermined fixed rate and mature in 2010.

Officials on the deal said New York City saved 25 basis point relative to fixed rate bonds. On Tuesday, the city paid 5.80% on fixed-rate bonds due in 2009 and 5.85% on bonds due in 2011.

Wiessmann said her firm worked with Sumitomo on a "joint venture" basis and hopes to work with them in the future on similar transactions.

New York City and Pryor officials did not return calls.

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