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Author: trader2012 Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 35400  
Subject: The Results of the Zions’ Auction Date: 3/22/2012 4:24 PM
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As mentioned in another thread, Zions Direct held a one-day auction for $300k of their 4.5’s of ’17. This is their summary of the results.

Final Market-Clearing Price: 94.250000
Final Market-Clearing Yield*: 5.843%


But now look at page one of the bids awarded, sorted by the bid price of the would-be buyer and the yields they obtained. As you can see, it was mostly the big boys who were bidding, and they weren’t bidding very aggressively. That suggests two things to me. There was less risk in this issue than I was assuming, or the big boys don’t care if they don’t earn a real rate of return for their shareholders. 4.5%? for (at best) a bottom-tier invest-grade issue? You’ve gotta be kidding, Why would any rational bond-buyer settle for that *unless* their bonus money were tied to relative performance and they were worried some other institutional would steal a march on them if they didn’t buy?

What I do like about ZD's auction process is that is sometimes possible to pick up bargains. But you've gotta know your prices, and you've gotta be willing to let the issue go to someone else if your price isn't met. Winning a bid isn't winning if you over-pay. Was a bid that resulted in a YTM of 5.84% overpaying? That's the tough question, right? and for each investor to determine for him or herself. But I would argue that 4.5% for a probably mandatory, 5-year holding-period isn't worth the risks now facing bond-investors.


Bidder 29783 250 100.000000 4.500% 3/22/2012 8:46:48 AM 250 units $ 235,625.00
Bidder 29775 50 100.000000 4.500% 3/22/2012 8:52:25 AM 50 units $ 47,125.00
Bidder 29791 100 100.000000 4.500% 3/22/2012 9:08:18 AM 100 units $ 94,250.00
Bidder 29792 50 100.000000 4.500% 3/22/2012 9:11:28 AM 50 units $ 47,125.00
Bidder 26795 250 100.000000 4.500% 3/22/2012 9:11:45 AM 250 units $ 235,625.00
Bidder 29793 50 100.000000 4.500% 3/22/2012 9:13:29 AM 50 units $ 47,125.00
Bidder 6581 1 100.000000 4.500% 3/22/2012 9:23:25 AM 1 unit $ 942.50
Bidder 29794 345 100.000000 4.500% 3/22/2012 9:27:39 AM 345 units $ 325,162.50
Bidder 29772 500 100.000000 4.500% 3/22/2012 9:49:36 AM 500 units $ 471,250.00
Bidder 29804 47 100.000000 4.500% 3/22/2012 10:17:16 AM 47 units $ 44,297.50
Bidder 7816 10 100.000000 4.500% 3/22/2012 10:18:21 AM 10 units $ 9,425.00
Bidder 28721 2 100.000000 4.500% 3/22/2012 10:21:46 AM 2 units $ 1,885.00
Bidder 18363 5 100.000000 4.500% 3/22/2012 10:30:46 AM 5 units $ 4,712.50
Bidder 23639 400 100.000000 4.500% 3/22/2012 10:48:36 AM 400 units $ 377,000.00
Bidder 13193 200 100.000000 4.500% 3/22/2012 11:09:01 AM 200 units $ 188,500.00
Bidder 24505 100 100.000000 4.500% 3/22/2012 11:12:10 AM 100 units $ 94,250.00
Bidder 13193 50 100.000000 4.500% 3/22/2012 11:25:20 AM 50 units $ 47,125.00
Bidder 29807 100 100.000000 4.500% 3/22/2012 11:30:32 AM 100 units $ 94,250.00
Bidder 15643 125 100.000000 4.500% 3/22/2012 11:46:12 AM 125 units $ 117,812.50
Bidder 29829 6 100.000000 4.500% 3/22/2012 11:54:47 AM 6 units $ 5,655.00
Bidder 29826 6 100.000000 4.500% 3/22/2012 11:58:32 AM 6 units $ 5,655.00
Bidder 18363 5 100.000000 4.500% 3/22/2012 12:26:45 PM 5 units $ 4,712.50
Bidder 13196 1,000 100.000000 4.500% 3/22/2012 12:30:59 PM 1,000 units $ 942,500.00
Bidder 29837 50 100.000000 4.500% 3/22/2012 1:09:38 PM 50 units $ 47,125.00
Bidder 18849 5 100.000000 4.500% 3/22/2012 1:22:51 PM 5 units $ 4,712.50
Bidder 29840 4 100.000000 4.500% 3/22/2012 1:25:21 PM 4 units $ 3,770.00
Bidder 29772 750 100.000000 4.500% 3/22/2012 2:58:13 PM 500 units $ 471,250.00
Bidder 29000 3 99.227724 4.675% 3/22/2012 2:53:37 PM 3 units $ 2,827.50
Bidder 23428 1 99.117971 4.700% 3/22/2012 12:16:22 PM 1 unit $ 942.50
Bidder 23427 1 99.117971 4.700% 3/22/2012 12:20:44 PM 1 unit $ 942.50
Bidder 29786 100 98.898892 4.750% 3/22/2012 8:56:51 AM 100 units $ 94,250.00
Bidder 29787 75 98.898892 4.750% 3/22/2012 8:59:08 AM 75 units $ 70,687.50
Bidder 29788 250 98.898892 4.750% 3/22/2012 9:01:55 AM 250 units $ 235,625.00
Bidder 29789 100 98.898892 4.750% 3/22/2012 9:04:06 AM 100 units $ 94,250.00
Bidder 27522 1 98.898892 4.750% 3/22/2012 1:58:40 PM 1 unit $ 942.50
Bidder 13571 10 98.750000 4.784% 3/22/2012 11:21:13 AM 10 units $ 9,425.00
Bidder 29773 3,000 98.750000 4.784% 3/22/2012 2:56:41 PM 3,000 units $ 2,827,500.00
Bidder 15443 50 98.680381 4.800% 3/22/2012 10:50:53 AM 50 units $ 47,125.00
Bidder 29773 2,000 98.500000 4.841% 3/22/2012 10:36:27 AM 2,000 units $ 1,885,000.00
Bidder 29773 3,000 98.250000 4.899% 3/22/2012 2:22:55 PM 3,000 units $ 2,827,500.00
Bidder 19920 1 98.022222 4.951% 3/22/2012 2:25:44 PM 1 unit $ 942.50
Bidder 29485 6,000 98.010000 4.954% 3/22/2012 2:52:46 PM 6,000 units $ 5,655,000.00
Bidder 14942 10 98.000000 4.957% 3/22/2012 8:37:43 AM 10 units $ 9,425.00
Bidder 29773 2,000 98.000000 4.957% 3/22/2012 12:34:12 PM 2,000 units $ 1,885,000.00
Bidder 29818 1,000 97.855190 4.990% 3/22/2012 1:12:14 PM 1,000 units $ 942,500.00
Bidder 29032 25 97.855190 4.990% 3/22/2012 1:59:51 PM 25 units $ 23,562.50
Bidder 29784 250 97.811984 5.000% 3/22/2012 8:51:31 AM 250 units $ 235,625.00
Bidder 29785 250 97.811984 5.000% 3/22/2012 8:54:27 AM 250 units $ 235,625.00
Bidder 29789 50 97.811984 5.000% 3/22/2012 9:04:06 AM 50 units $ 47,125.00
Bidder 29790 50 97.811984 5.000% 3/22/2012 9:06:08 AM 50 units $ 47,125.00
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