News
February 21, 2013
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For some time, the executive and legislative branches of the United States government have been trying to come to grips with the yawning federal deficit.
The executive branch, particularly under President Barack Obama, has had one approach to addressing this issue. The legislative branch, particularly with a Republican-led Congress, has had a different approach. The attempt to bridge this gap - and difficulties in doing this - has had a number of impacts on local governments nationally, including in New England.
November 8, 2012
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Due to the market environment regulations over the past few years, the rating agencies have implemented many changes affecting local government issuers. While local governments have a low default rate compared to many other issuers, public sector investors are looking for more transparency in these credit assignments. We've all heard about bankruptcies in California and in our own backyard of Rhode Island - to name a few. While similar situations in Massachusetts are highly unlikely, never say never.
One of the most important components of issuing public sector debt is the credit rating that is assigned to your issue of notes or bonds. Many of you are familiar with Moody's Investors Services and Standard & Poor's Ratings Services as well as Fitch Ratings Group. Have you heard of Kroll Bond Ratings? While writing about these agencies, and the role they play in your debt issuance could entail a college-length thesis, we thought we'd briefly hit on a few highlights for each entity, what changes have been made recently and what changes may be in store for the future. As always, we encourage you to contact your UniBank financial advisor for a more in depth discussion regarding what rating agency options would be most beneficial to you and your community.
July 25, 2012
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In the last edition of this newsletter, we reviewed the general issues associated with post issuance compliance. We also reviewed the specific new requirement associated with the issue of tax-exempt debt - that a new box be checked on the IRS form 8038 indicating, if applicable, that the issuer has a post issuance compliance policy in place. Over this calendar year, this new requirement has become the catalyst that has resulted in the adoption of many such policies by issuers of notes and bonds, primarily at the prompting of bond counsel - and we should all assume that this practice will continue.
In this issue, we will present what we believe should be incorporated into an effective post issuance compliance policy.
April 9, 2012
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Recently, post issuance compliance for tax-exempt financing has become a central focus in the bond and note issuance process.
This is not a new issue; it has been around as long as tax certificates have been executed with tax-exempt securities. And it shouldn’t be new to most certified treasurers; it has been discussed in the opening session of the annual MCTA School in Amherst for the past three years. However, now it is an issue that has made its mark – a box to be checked on the IRS form 8038-G; and for those of you who have done recent bond or note issues with full disclosure and legal opinion, it is an issue receiving considerably more attention from Bond Counsel than in previous years.
This article is the first of two on post issuance compliance that we will present on this website – two articles because there is plenty to discuss, and because we don’t want to overload you with too much information creating one more concern that might keep you awake at night. This month, we review the basic issues associated with post issuance compliance; and next month we will present what we suggest as an outline of objectives and topics that should be included in a policy.
