Presentation is loading. Please wait.

Presentation is loading. Please wait.

Presentation to : CML Workshop Financing Public Improvements January 30, 2009 Top Tips for Issuing Municipal Bonds Since 1895. Member SIPC and FINRA. Jason.

Similar presentations


Presentation on theme: "Presentation to : CML Workshop Financing Public Improvements January 30, 2009 Top Tips for Issuing Municipal Bonds Since 1895. Member SIPC and FINRA. Jason."— Presentation transcript:

1 Presentation to : CML Workshop Financing Public Improvements January 30, 2009 Top Tips for Issuing Municipal Bonds Since Member SIPC and FINRA. Jason Simmons Vice President Investment Banker Helen Cregger Vice President Investment Banker Michael Lund Vice President Investment Banker Piper Jaffray & Co. Public Finance Services th St., Suite 1250 Denver, CO 80202

2 CML Workshop – Financing Public Improvements January 30, DETERMINE THE END GOAL What is final project? New Recreation Center Water Treatment Facility Detention Facility Commercial or Residential Development

3 CML Workshop – Financing Public Improvements January 30, PLAN AHEAD Start early! Many projects take a few years from initial discussions to the bond issuance process. Start laying the ground work for rate increases for enterprise revenue bonds if necessary. May need to work in election for voter authorized projects. Coordinate bond issuance with start of construction.

4 CML Workshop – Financing Public Improvements January 30, FAMILIARIZE YOURSELF WITH PROCESS Gain an understanding of the bond issuance process by utilizing available resources CML Workshops and Publications GFOA Workshops and Recommended Practices Other Municipalities Bond Community

5 CML Workshop – Financing Public Improvements January 30, ASSEMBLE YOUR TEAM EARLY Get the professionals on board early to help in the decision process Determine composition of the team Do you want do use a Financial Advisor? Do you envision a competitive or negotiated sale? Will you have a Senior Managing Underwriter and Co- Managers? Will you use the same firm as both Bond Counsel and Disclosure Counsel?

6 CML Workshop – Financing Public Improvements January 30, EVALUATE FINANCING OPTIONS Credit Quality Market Considerations Other Considerations General Obligation Bonds HighestWidest market acceptance Requires vote Sales Tax Revenue Bonds Same as or one notch lower than GO rating Widely accepted but spreads can fluctuate based on coverage General pledge of all revenues vs. dedicated revenues, requires vote Certificates of Participation One or two notches below GO Rating Market does not like Annual Appropriation Risk, essentiality key Does not require a vote but no dedicated revenue stream Enterprise Revenue Bonds Dependent on essentiality of revenue stream and coverage levels Essential revenue such as water and sewer are more widely accepted Need to form enterprise under TABOR and monitor revenues

7 CML Workshop – Financing Public Improvements January 30, DEVELOP A FINANCING PLAN Create a financial model and timetable that works for you Go to market when you need the money

8 CML Workshop – Financing Public Improvements January 30, BE AWARE OF MARKET CONDITIONS Do not want to be surprised at the outcome Ask you underwriter or financial advisor to give you frequent market updates. What is the overall level of interest rates? What other issues are have been completed recently or are on the calendar? What are investors thoughts about insurance? How will investors view your security and ratings?

9 CML Workshop – Financing Public Improvements January 30, UNDERSTAND OBLIGATIONS Spend down requirements of bond proceeds Continuing Disclosure 15 c-2-12  A studyreleased in 2008* found that more than half of the municipal bonds sold between have been delinquent in filing financial disclosures. Bond covenants  Rate maintenance  Additional bonds tests Ratings require some monitoring * Source: Bond Buyer Wednesday, September 3, 2008

10 CML Workshop – Financing Public Improvements January 30, EVALUATE PROCESS It is difficult to evaluate the process based on final borrowing costs. Did you work well with the financing team and did they work well together? Did you feel your story was accurately reflected in the rating process? What would you change next time?

11 CML Workshop – Financing Public Improvements January 30, ENJOY A JOB WELL DONE The bond issuance process is a time consuming task that is accomplished in addition to all of your other day to day duties so take time to celebrate upon a successful closing.

12 CML Workshop – Financing Public Improvements January 30, TOP TEN TIPS 1.Determine the End Goal 2.Plan Ahead 3.Familiarize Yourself with the Process 4.Assemble Your Team Early 5.Evaluate Financing Options 6.Develop a Financing Plan 7.Be Aware of Market Conditions 8.Understand Obligations 9.Evaluate the Process 10.Enjoy a Job Well Done


Download ppt "Presentation to : CML Workshop Financing Public Improvements January 30, 2009 Top Tips for Issuing Municipal Bonds Since 1895. Member SIPC and FINRA. Jason."

Similar presentations


Ads by Google