Harvard, which has seen many of its students and graduates capitalize on the opportunities of e-commerce, did so itself last week when it completed a $168 million bond sale online.

The University became the first Massachusetts non-profit organization to sell bonds on the Internet last Thursday, and it expects to begin a second, $197 million bond offering tomorrow.

"Harvard has taken the lead to use the technology [of the Internet], and we hope that other nonprofits will soon follow," said Robert Ciolek, executive director of Massachusetts Health and Educational Facilities Authority (HEFA), the agency that handled the bond sales.

Last Thursday, investors agreed on a bond price and negotiated a deal with Lehman Brothers, the investment bank underwriting the sale. The money is due to change hands next Thursday.

In its venture, Harvard worked with Lehman Brothers to make information about the bonds available to investors on the bank's website. Investors had online access to the information such as the offering's summary sheet, timeline, preliminary official statement, preliminary pricing data and number of orders for each series of bonds.

Investors were also able to place orders for the bond electronically, reducing the amount of paperwork required and streamlining the bond sale process.

Posting bond information on the Internet makes it available to a greater number of people, leading to a broader demographic of investors in the offerings, according to HEFA officials. The online bonds have, for example, increased the proportion of retail to institutional investors.

"The advantage for the University is wider distribution of the bond sale, hopefully resulting in lower interest rates," Ciolek said.

The capital raised from the bond sale will refinance Harvard's outstanding debt, as the University repays old bonds and issues new ones with lower interest rates. In contrast to capital bonds, which raise money for specific projects, these particular bonds will refinance debt sold to finance projects in the 1970s.

The bond sale has overshot its goal by saving four percent on the costs of previous bond offerings. In certain maturities, bonds were oversubscribed--there were more orders for the bond than was offered, allowing for lower interest rates.

"We were very pleased," said Laura C. Sanders, the University's manager of debt and treasury operations.

HEFA is an independent state agency that assists the capital raising efforts of educational, health, cultural and other non-profit institutions through loan programs and the sale of tax-exempt bonds.

The bonds carried the highest credit ratings from agencies such as Standard & Poor's and Moody's Investor Services, which rated the bonds AAA and Aaa, respectively. The agencies reviewed the University's credit profile and financial assets, assigning a credit rating to reflect Harvard's ability to pay back the debt.

After the refinancing of the fixed-rate bonds, a similar refinancing of Harvard's variable-rate debt, with $197 million in bonds, is expected to begin tomorrow.