Primary market gets boost from technology

The muni market still relies on long-standing practices, some of which have become outdated. However, the exponential advancement of technology will help move the needle in the primary market; it will just take time.

"There are some opportunities to make some changes to keep up with technology," said David Erdman, managing director at Baker Tilly and former capital finance director for Wisconsin, at The Bond Buyer's Tech Forum conference on Wednesday.

Over 30 years ago, when involved with his first competitive sale, Erdman had people from Chicago drive up and drop off their bids at his office, since market participants at that time could not rely on telefax.

Technology has since improved the sales process, with no need to print thousands of preliminary offering statements and thousands of final official statements, which are now delivered electronically, he said.

However, some things remain the same: "How we settle with DTC, how we do the electronic bidding for negotiated sales, how we have that poker game between the advisor and the issuer versus the underwriter and the investor," Erdman said.

Many "great technology solutions" are available either in-house or through third-party vendors, said panelist Dan Silva, CEO and cofounder of Adaje.

Market participants need to figure out what, from a workflow perspective, they want to outsource to advisors and bankers versus building or purchasing the tooling necessary. When building or purchasing, you inevitably run into things that technology folks have not provided, he said.

For Christina Saggiomo, senior director of capital finance for the Philadelphia Department of Aviation, which manages the Philadelphia International Airport and Northeast Philadelphia Airport, some of the tools her organization needed were either too expensive or didn't exist.

This led the issuer to build some things in-house to improve on older government systems, she said.

The adoption of technology and the speed at which it's deployed can differ, Silva said, noting smaller and medium-sized firms can adopt technology more quickly than larger companies.

For the latter, there may be some concerns about the third-party vendors' capabilities, such as data migration, which Silva said, "We can handle."

"Those are hurdles. There's a process for that, and making sure folks' needs are met," he said.

Sometimes, though, the tried-and-true method may be better.

Anecdotally, Saggiomo wondered during the panel if artificial intelligence is the reason why there were no one-on-one requests from investors when the issuer came to market last year for the first time in four years.

"Maybe AI [is] giving them all this great information; they don't really need to talk to us directly, and we had a discussion of 'How do we feel about that,'" she said.

Therefore, the issuer may need to be more proactive and not wait for the buyside to come to them.

It's possible the "more hands-on approach of roadshows and all these other things that went away for a period of time, that maybe that actually needs to come back, maybe we need to be more proactive in that way to the buyside to still have access to all these tools to do their job quicker and faster and more efficiently and have good information about us, but we could still enhance that by continuing to have this high touch approach," Saggiomo said.