WASHINGTON -- Just as the arduous task of putting a municipal offering together draws to a close -- underwriters shake hands with the issuers, financial advisers smile over a job well done, and the trading floor waits in anticipation to push the brand new bonds out the door -- the wheels of an unseen machine begin to turn.

The machine is the Municipal Securities Rulemaking Board's new information library for bond documents, and it needs that freshly printed official statement.

So there's yet one more task for the underwriter, to ship the official statement to the MSRB in Washington D.C. The rulemaking board then turns around and sends it to London, Ky., where Appalachian Computer Systems, the contractor chosen by the MSRB, sets things in motion.

Once the document arrives, ACS moves in quickly with state-of-the-art technology. Their job: make picture-perfect images of each page of the document.

The images are stored on two types of tapes. The first, a magnetic tape, is flown back to the Municipal Securities Information Library for quality review. The second, a compact version, is sent directly to information vendors.

After two months of testing, the system officially got off the ground in mid-April.

The very first official statement to appear on an ACS-prepared disk -- trivia mavens take note -- was a $3 million Missouri State Environmental Improvement and Energy Resource Authority water facilities revenue issue for Raytown, Mo. It is dated April 23, 1992.

Christopher Taylor, executive director of the MSRB, said that when an official statement or advanced refunding document arrives, the rulemaking board logs in the information, and by no later than 4:00 the same afternoon it flies the document via Sky Courier to Lexington, Ky. The documents are picked up at Bluegrass Field airport by ACS, which drives the documents down 1-75 to London in about two hours.

Transcribing in the Wee Hours

Mr. Taylor noted that Sky Courier is the same transport firm that many hospitals use to fly live organs to transplant patients.

"If one of the [containers] comes through with a live heart, we know the boxes got mixed up."

ACS employees work through the night, from 1:00 a.m. to roughly 8:30 a.m., processing the information. They begin by separating the documents into individual pages, then each page is run through scanning equipment that looks like a copying machine.

The machines have high definition monitors attached that allow technicians to see images in considerable detail. This acute resolution reveals imperfections -- blurring, tilted images or broken type -- which

t technicians can flag

as problems in the original document. ACS then files the images, which now include annotations of any problems, temporarily on a central computer with enormous storage capacity.

Giga Megabytes

At roughly 8:30 a.m. they begin producing the high-capacity digital tapes that will go directly to subscribers. "The thing fits into the palm of your hand," Mr. Taylor said, but it holds as much as 1.2 gigabytes of information, or the equivalent of 1,875 floppy disks.

"That number of gigabytes probably gets you 16,000 to 18,000 pages," he said, adding that the MSRB receives a magnetic optical disc of the day's official statements and does "quality assurance." The discs are reviewed by a software written for MSRB called MSILView.

"We sit down and look at the originals and what they imaged to see if they got it right," he said. "So far they're doing a hell of a good job. More than 99% are coming through perfect."

The whole process -- from the time ACS receives the documents to when tapes are sent out to vendors via United Parcel Service, Federal Express, or regular mail -- takes 24 hours, Mr. Taylor said.

Officials with ACS declined to comment for this article, citing proprietary concerns.

Consulting Oracle

Mr. Taylor said several firms are lining up to receive tapes. Bloomberg Financial Markets is the only firm officially to sign up, but several others are expected to sign on, including The Bond Buyer, J.J. Kenny Co., Interactive Data, Municipal Bond Investors Assurance Corp., and entrepreneur Donald Beatty.

The MSRB's executive director said that when the board first receives an official statement it is indexed on a data base using an "Oracle" data base software, called MSILDex. One copy goes into a file folder and made available at the board's public access facility, where it is stored for a year.

Mr. Taylor said the board has begun designing its electronic pilot system for secondary market disclosure, called Continuing Disclosure Initiative, or CDI.

"There's nothing magical" about the technology, he said. "We are having software written outside" by a systems integration firm in nearby Arlington, Va. called Spexus Inc.

"They've done a lot of systems integration for the board's offices in the past," he said. "They are putting together a small network of personal computers with incoming facsimile machines and modem lines and outgoing facsimile and modems."

He said the system will be set up in the board's new branch office in nearby Alexandria, Va.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.