SOURCE: The Bond Buyer

The Bond Buyer

December 16, 2009 12:25 ET

The Bond Buyer Online Adds Refunding Calculator to Help States and Local Governments Save Money

Andrew Kalotay Associates' Model Makes 'Option Value' Transparent

NEW YORK, NY--(Marketwire - December 16, 2009) - The Bond Buyer, SourceMedia's daily newspaper covering the $2.7 trillion municipal finance industry, today added a new 'advance refunding' calculator to its web site. This sophisticated tool combines analyses of savings and "option value" to help state and local governments maximize the savings they can reap from refunding their outstanding debt.

Current industry practice focuses primarily on present-value savings from a refunding. The new calculator, available at, adds the missing dimension of opportunity cost by comparing the savings to the value of waiting for potentially more attractive rates. It then makes a recommendation on whether the refunding should go forward.

The calculator, developed by Andrew Kalotay Associates, builds on the firm's extensive expertise in option valuation and debt management. "With the Advance Refunding Analyzer, municipalities will have access to the same high-powered technology used by the most demanding issuers in the taxable space, who sweat every basis point when making refunding decisions," said Andrew Kalotay, president of Andrew Kalotay Associates, Inc.

In addition to Kalotay's proprietary algorithms, the calculator incorporates multiple data feeds, so issuers can get an up-to-date assessment of their refunding opportunities. The inputs include:

--  Bond terms and conditions data from Mergent
--  Municipal market yields from Municipal Market Advisors
--  Treasury yields from the BondDesk Group

"We think our audience -- issuers, financial advisors, and even investment bankers -- will want to visit the calculator regularly to see how trends in the taxable and tax-exempt markets are influencing their opportunities for savings," said Michael Stanton, the Managing Director of SourceMedia's Capital Markets Group. "At a time when every public-sector dollar is precious -- and the general public is on high alert for ill-conceived financial maneuvers -- it is more important than ever for government officials to capture maximum value before locking in their financing plans."

About Andrew Kalotay Associates, Inc.

AKA is a leading provider of high-precision, high-speed fixed income analytics and corporate, agency, and municipal debt management advisory services. AKA's clients include banks, trading and risk management software vendors, data service providers, rating agencies, asset management firms, as well as fixed income exchange traded fund (ETF) sponsors. The firm received a patent for its CLEAN™ MBS valuation and prepayment model.

About The Bond Buyer and SourceMedia

The Bond Buyer ( is SourceMedia's 118-year-old daily newspaper of municipal finance, and is distributed in print and online to an audience of more than 15,000 municipal bond professionals nationwide. The Bond Buyer Conferences reach more than 1,500 attendees each year and are the market's premier venues for education and professional development.

SourceMedia (, an Investcorp company, is the pre-eminent provider of timely and essential news, analysis, research, and insights for members of the financial services community, and the related fields of professional services and technology. SourceMedia offers its clients and subscribers professional publications, industry-standard data applications and in-depth seminars and conferences.

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