As an independent public financial advisor, it is our goal to assist our clients in devising a financial strategy that results in the lowest cost with the most beneficial terms. We do not feel that one method of financing is superior to another, but rather evaluate the options and conditions in the market, combined with the various terms of the financing and credit of the issuer to devise a marketing strategy which results in the best approach of marketing the bonds. The Government Finance Officers Association’s (GFOA) “Best Practices” recommends that issuers should hire independent financial advisors to work with them in structuring any financing. We help you structure financings to fit your needs, and then assist you in working with rating agencies, bond attorneys and any other entities in obtaining ratings, drafting documents and taking bids for a competitive sale or working with underwriters in a negotiated transaction. Once the bonds are sold, we will work with all parties to handle all of the closing details.
PFA has a demonstrated track record with the competitive sales process and has facilitated competitive public sales for a number of its clients. PFA is also proficient with a negotiated underwriting structure if the characteristics of the transaction indicate a negotiated transaction is more appropriate or if this is the preference of the issuer.
Since its formation, PFA has served as a financial advisor for over 150 bond issues totaling over $5.7 billion.
The following is a summary of the services provided by PFA, in its capacity of independent financial advisor, for a competitive or negotiated sale of bonds.
PFA works with the issuer in structuring a financing plan that best meets the needs of the issuer, the project timing, the repayment source and other financing details.
PFA assists in preparing the sale documents such as the notice of sale and bid form. We look at similar transactions currently in the market to make recommends rate limitations, the pricing limitations, the basis for the award of the bonds and other conditions as required. We also work with bond counsel in drafting the required legal documents including the preliminary and final official statement.
In order to devise a strategic marketing plan for the sale, PFA monitors the general condition and trends of the economy, the condition of capital markets, recently sold similar issues, the number of issues coming to market, and status of competing issues. PFA implements the marketing plan by distributing information to prospective bidders, handling electronic dissemination of the preliminary official statement and notice of sale and arranging for advertisement of the sale and sale documents in The Bond Buyer as well as Thomson Reuters and Bloomberg in order to maximize the number of bids received through a competitive sale.
PFA works with the Parity electronic bidding system in order to create a smooth bidding process and fair evaluation of the bids for award. By using electronic dissemination of documents and electronic bidding, prospective bidders are able to review documents and submit bids in a short amount of time if needed.
PFA works with the issuer, rating agencies and credit enhancers to decide if the bonds should be sold as unrated, rated or insured bonds. PFA works with the issuer to structure the financing in order to obtain the highest possible rating. PFA initially does its own review of the issuer based on rating methodologies of the 3 main Rating Agencies, advises of possible improvements that can be made to improve the overall issuer rating, anticipates rating agency questions and analysis, prepares presentations and reports for the rating agency, and facilitates rating agency meetings. PFA has been successful in obtaining credit rating upgrades for many of its clients, including an upgrade to AAA/Aaa in an environment where most credits are being downgraded.
Additionally, PFA reviews the feasibility of acquiring a municipal bond insurance policy. In determining the feasibility of insurance, PFA prepares a present value analysis of the debt service based on insured and uninsured interest rates. The present value savings are then compared to the insurance premium to determine whether insurance acquisition is cost effective.
PFA represents the issuer at the time of the bond sale and facilitates the receipt of the bids, comparing the bids, analyzing the bids for conformance to the requirements and advises on accepting the bids. PFA maintains proprietary software for analyzing bids and uses this software in analyzing each sale (negotiated or competitive).
PFA assists in all aspects of the closing process, from drafting the closing disbursement memo, obtaining costs of issuance invoices, coordinating payment information, ordering CUSIPs to reviewing final documents.
Public FA provides a final report detailing the transaction from conception to closing including market analysis, comparative pricing analysis and general overall results.
| 116 Jefferson Street South, Suite 301 | Huntsville, Alabama 35801 | tel 256.536.3035 | fax 256.533.2501 |