Guidebook for Effective Policies and Practices for Managing Surface Transportation Debt (2022) / Chapter Skim
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Pages 1-7
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1 Objective of this Guidebook This guidebook provides surface transportation debt-financing practitioners with a detailed step-by-step guide to the debt issuance and management process and highlights a diverse suite of effective practices issuers can use to inform their decisions. By using debt, a transportation agency can complete a capital project with a repayment schedule that spreads the cost of that project over its useful life, while the purchaser of the debt receives a reasonably reliable source of investment income.
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2 Guidebook for Effective Policies and Practices for Managing Surface Transportation Debt • Rulemaking, and • Developing and disseminating guidance to issuers and investors. These agencies/entities include the Securities and Exchange Commission (SEC)
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Summary 3 • Determining financing approaches and debt types in addition to aligning the type of debt with surface transportation priorities and policies; and • Incorporating iterative learning from previous transactions to inform the debt strategy, including market analysis. Each of these decisions is described below.
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4 Guidebook for Effective Policies and Practices for Managing Surface Transportation Debt Phase 2: Individual Transaction Preparation and Development Phase 2 addresses the following decisions that issuers must make to prepare an issuance, which will be influenced by the outcomes of Phase 1: • Determining timing and amount of the issuance, • Determining the method of sale, • Confirming the debt approach, • Soliciting and utilizing professional support, • Selecting and engaging with credit rating agencies, and • Developing relevant debt documents. Determining Timing and Amount of the Issuance Two important factors influence the timing of debt issuance: (1)
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Summary 5 Selecting and Engaging with Credit Rating Agencies The purpose of engaging with credit rating agencies (CRAs) is to obtain one or more credit ratings, which are used by investors to gauge the credit risk of a debt issuance.
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6 Guidebook for Effective Policies and Practices for Managing Surface Transportation Debt state or federal requirements. To manage this information and this process, issuers often use templates and checklists.
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Summary 7 Collecting and Managing Data Issuers are expected to track relevant information and to succinctly report on data to meet compliance obligations. The following primary categories of data need to be tracked and reported: (1)
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