5.7.1 Marketing Strategy

One of the advantages of selling bonds in a negotiated sale is the opportunity to pre market the debt issuance to investors, including those identified as target investors in an offering’s marketing plan. The marketing plan should include a marketing strategy that describes the methods the underwriters will use to reach the target investors. Typically, these methods may consist of notices published in print and electronic media with financial or local publications, advertisements on broadcast media, investor conference calls, and internal sales correspondence. The senior managing underwriter, issuer, and other financial team members may also conduct an investor “road show” for the anticipated bond sale, typically a webinar style presentation made available online to investors, sometimes accompanied by a recorded presentation.

During this pre sale marketing period, the underwriters also assess feedback from prospective investors, which helps to gauge investor demand and provide information that may be used to adjust the debt amortization structure of the bond issue. It is important for the issuer and senior managing underwriter to recognize these market nuances when pricing and marketing the bond issue. It is also important for issuers to recognize that marketing a debt issuance to investors involves speaking to the market. As a consequence, marketing must be conducted in strict compliance with the anti fraud provisions of securities laws pertaining to municipal debt, specifically those pertaining to selective disclosure. See Section 6.3, The Official Statement.