6.3.5 Conduit Offerings

In most conduit offerings of municipal securities, debt service on the securities is payable solely from amounts received by the governmental conduit issuer from the conduit borrower. Therefore, in such transactions, information on the financial condition of the conduit issuer is not necessary (and could be misleading) and should not be included in the OS. The OS should, moreover, make clear that the conduit issuer is assuming responsibility only for the limited material included in the OS that has been provided by it, which is generally only a brief description of the conduit issuer and a statement that there is no pending litigation against the conduit issuer challenging the financing or the issuance of the municipal securities. Rather, all of the typical disclosures that an issuer would have to make are done instead by the conduit borrower and full information on the conduit borrower, its guarantors, and/or its credit and liquidity provider is included.