The Massachusetts Bay Transportation Authority has selected Merrill Lynch & Co. as senior bookrunning manager for its next bond offering, industry sources said Friday.

Merrill Lynch held the top slot on the authority's last deal, a $230 million issue that was marketed a year ago.

The $275 million offering slated for this month had been on hold during what turned out to be an arduous search for senior manager. The search winnowed out a field of 36 applicants to 24 firms that went through an oral interview process.

Of the firms that made it through interviews, 10 were invited to submit bids to determine which one would have the top position on the negotiated offerings for the next two years.

Public finance professionals familiar with the deal disclosed the list of the 10 finalist firms early last week. Sources said on Friday that the 23 firms beside Merrill Lynch that made it to the interview process would all serve as co-managers.

The process of selecting underwriters for two years of the authority's deals proved acrimonious at the end, with public finance professionals charging that the transportation authority had played unfairly by requesting the mock bids after the interview process, rather than naming the lead manager immediately, as is normally the case.

For Merrill Lynch, the book-running responsibilities at the transportation authority are an important toehold in the Massachusetts general obligation public finance arena. The authority's bonds are backed by the full faith and credit of Massachusetts.

Merrill Lynch often served as book-running senior manager on the state's GO deals under the administration of Treasurer Robert Q. Crane. But when Republican Joseph D. Malone took over, he reshaped the state's syndicates, dropping Merrill Lynch out of the top bracket.

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