The New Jersey Transportation Trust Fund Authority sold a $61 million competitive deal yesterday with a feature designed to attract minority- and women-owned firms, but the special mechanism failed to attract a single one.
Instead, the portion of the deal the state had expected to sell to minority- or women-owned firms went to two small local firms: Golden, Harris Capital Group and R.J. Walls & Co.
The two firms took 800,000 and $250,000 of bonds respectively. The rest of the $9.2 million set-aside was moved to the main portion of the offering when no other bidders materialized, officials working on the issue said.
In recent months, several minority- and women-owned firms expressed concern that they would be shut out of state business following Gov. Jim Florio's order last May banning most forms of negotiated debt by the state or its authorities. Competitive deals generally require higher capitalization levels than most minority- and women-owned firms maintain.
The new feature on the trust fund transaction was supposed to address some of those worries. Under its provisions, firms could only order up to $250,000 of bonds in each of four maturities, at prices set by yesterday's dutch auction for the larger portion of the bond sale.
The feature was applied to 15% of the deal, and stipulated that the bonds be divided according to the following priority: minority firms based in the state, any minority firm, women-owned firms based in the state, and any women-owned firm.
When no one fitting any of those descriptions stepped up to bid on the deal yesterday, the two local firms were awarded the $1.05 million of bonds they requested.
Robert Lurie, the state's director of public finance, said he and other state officials plan to examine the set-aside feature to see if it should be adjusted to attract more interest.
"We were disappointed we didn't get minority firm subscriptions, but we feel we have to provide for them to participate directly in the sale," Lurie said.
Richard V. Riccardi, president of R.D. White, Glaves & Co., a minority firm that is active in the state, said he thought the trust fund deal was attractive, but the special set-aside portion did not include maturities long enough for his firm's needs.
Tom Monti, an executive vice president at M.R. Beal & Co., said the firm felt the new provision was aimed at helping minority firms not as well capitalized as Beal, and so did not consider bidding under the special bracket.
Lurie said the rest of the deal worked well, with a total of 21 bids coming from five different bidders. The last trust fund deal, a $500 million offering in April, attracted just two bidders, Lurie said.
On yesterday's issue, First Boston Corp. took the biggest portion of the main offering, a $40.4 million chunk of maturities ranging from 1994 to 1997 with coupons from 2.6% to 3.7%. Donaldson, Lufkin & Jenrette Securities Corp. won $16 million, and United Jersey Bank won $4 million.
