New York City has been one of the most active issuers in utilizing pre-sale retail order periods in city-related bond financings.
In 1994, New York began using retail order periods to sell the debt obligations of the city and NYC-related financing entities.
Issuers planning retail order periods should work with their financial advisors to carefully think through the composition of the management group to ensure not only a successful retail order period, but also a successful institutional pricing.
Generally, longer retail order periods (approximately two or three days) are necessary when 1) institutional demand is weak and 2) in states where generating retail orders is more difficult due to low or nonexistent state and/or local income taxes.
Issuers should realize that for retail order periods to function appropriately over time, there is a need to "police" valid retail orders.
The maturities most popular for retail order periods are 10 years and shorter.
When the retail order periods were first introduced in November 1994, the city's quarterly General Obligation bond financings averaged more than $700 million per sale.