i.4.1.3 Post-Issuance Phase

i.4.1.3 Post-Issuance Phase

During the post issuance phase, a public agency may wish to retain the following municipal market professionals:

  • PUBLIC AGENCY DEBT ADMINISTRATION – Issuers of public debt are responsible for performing several administrative tasks, including tracking, monitoring, and reporting on the proceeds of bond sales. Some of these tasks may be supported by or performed by consultants. The public agency staff administers the agency’s funds to ensure compliance with financial and administrative policies and procedures. This work involves projecting revenues and expenditures, establishing budgetary authority, and monitoring budgetary activities; procuring and administering contracts; accounting for the financial activities of the agency; and developing and administering internal control systems.
  • THIRD PARTY ADMINISTRATORS AND CONSULTANTS – Many public agencies contract with service providers to administer revenue collections, arbitrage and tax reporting, auditing, and financial reporting. Issuers may rely on tax consultants to interpret U.S. Treasury rules and their compliance with these while allocating debt proceeds.
  • DISSEMINATION AGENTS – Issuers may on their own prepare and disseminate the disclosures or engage third party providers to act in their behalf to submit information required under their continuing disclosure agreement or in compliance with their SEC Rule 15c2-12 undertakings. The work of a dissemination agency may be performed by a trustee or municipal advisor as well.
  • INVESTMENT ADVISORS – Issuers typically invest the proceeds of a bond sale to increase project funding and to take advantage of economic opportunities in the market. Issuers may rely on investment advisors to make recommendations that achieve these goals and to purchase securities. If these recommendations include the investment of bond proceeds, then the investment advisor is acting as a municipal advisor and must meet the requirements of the Municipal Advisor Rule. This includes registering with the SEC and MSRB and passing the Municipal Advisor Representative Qualification Exam.25 Issuers should consider the advice offered by investment advisors as one of many options and evaluate potential advisors to identify those that meet the issuer’s goals and policies.
  • REMARKETING AGENTS AND SWAPS DEALERS – In order to obtain lower interest rates on their debt, some issuers may choose to issue variable-rate bonds that may be reissued on a regular schedule. This “reissuing” achieves short term borrowing rates even though the debt may be outstanding for many years. Issuers engage a service provider called a remarketing agent to conduct the rate setting and remarketing process. Alternatively, issuers of long term, fixed rate bonds may swap the interest component to a variable rate. They do so by entering into an agreement with an intermediary or counter party, to receive a fixed rate of interest while paying a variable-rate.
  • MUNICIPAL ADVISOR – Municipal advisors may assist issuers with ongoing obligation under securities law to provide annual financial reports and to make event notifications. A municipal advisor may evaluate opportunities to refund outstanding debt to lower the cost of borrowing, to benefit from an alternative debt structure, or to address restrictions imposed on the issuer by covenants or others terms contained in the outstanding obligation. As noted above, municipal advisors must register with the SEC and MSRB and comply with the requirements of MSRB Rule G-3.
  • LEGAL COUNSEL – Legal counsel advises the issuer with respect to the obligations it has undertaken; specifically, tax covenants and continuing disclosure.