Using a quasi-competitive process, Maine last week awarded a $160 million tax anticipation note offering to an eight-member syndicate headed by Prudential Securities, state treasurer Samuel Shapiro said.
State officials winnowed the field of competitors down to eight financial firms and then asked the firms to bid on how much management fee they would charge.
Prudential won, submitting the lowest bid, Mr. Shapiro reported. Morgan, Stanley & Co. produced the cover bid.
Before the bidding Thursday, Mr. Shapiro said, the eight competing firms had agreed the senior manager would receive 50% of the management fee for the deal, while other syndicate members would each get 6%.
An 8% slice of the management fee would be reserved for Maine-based bond dealers, he noted.
The deal could be priced by the end of June, according to a source in the municipal note department at Prudential.
The approximate maturity would be one year.
Mr. Shapiro said the underwriting process, which he described as a combination of competitive bidding and negotiation, had saved the state about $150,000.
"It's a unique way of doing it. It's not truly competitive," he said.
When the state came to market with $150 million of tax anticipation notes last year, the management fee was roughly $1.58 per $1,000 bond, Mr. Shapiro said.