BidLouisiana Helps State Get Best Possible Price on CDs

BATON ROUGE, LA – Louisiana banks were able to place bids online for $39.6 million in certificates of deposit (CDs) during a web-based auction held by the Louisiana Department of the Treasury, according to State Treasurer John Kennedy.
“The Treasury has moved completely toward online bidding, whether we’re auctioning CDs or selling bonds,” said Treasurer Kennedy. “Our web auctions and sales are similar to eBay. They help us get the best possible price on CDs while at the same time providing liquidity to Louisiana banks.”

Using BidLouisiana.com, the Treasury awards cash to winning banks with the highest bids in exchange for CDs. Each bank’s bid consists of the amount of money it needs and the interest rate it is willing to pay. Bids in January’s auction ranged from 0.065 percent to 0.07 percent.

“The state relies on CDs as a stable, low-risk investment,” said Treasurer Kennedy. “But the program is also beneficial to banks because BidLouisiana makes more cash available for businesses and individual customers. This results in more money moving into our communities through small business and consumer loans.”
Over the past 13 years, the state has accepted $2.7 billion in bids using BidLouisiana, resulting in $25.7 million in total earnings for the state. By law, the Treasury may competitively bid up to 50 percent of state funds available for investment in CDs. The next BidLouisiana auction is scheduled for April 15, 2014. For more information, visit www.LATreasury.com.

Contact:
Sarah Mulhearn
(225) 342-0012
smulhearn@treasury.state.la.us