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Pages 57-69

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From page 57...
... 57   5.1 Overview After preparing and developing individual transactions in Phase 2, issuers must market the transaction to the municipal bond market in order to attract investors and optimize interest rates. In turn, with a successful marketing effort and sale (placement)
From page 58...
... 58 Guidebook for Effective Policies and Practices for Managing Surface Transportation Debt municipal market. Individual transaction preparation for both competitive and negotiated sales requires support from outside professionals, including FAs, bond counsel, rating agencies, auditors, trustees, and underwriters.1 However, competitive and negotiated sales vary by when the details of each sale are settled, and when outside professionals are utilized in the presale process.2 In a competitive sale, the bond issue is structured in advance of selecting an underwriter, while in a negotiated sale the issuer and the selected underwriter set the structure of the bond issue.3 Figures 17 and 18 show the process for competitive and negotiated sales, respectively.
From page 59...
... Phase 3: Marketing and Placement of Individual Transactions 59   once finalized, the issuer markets the offering, soliciting underwriters to make a bid. The issuer typically elects to sell to the underwriter that offers the lowest interest rates.
From page 60...
... 60 Guidebook for Effective Policies and Practices for Managing Surface Transportation Debt purchase. e issuer, FA, and underwriter review the initial purchase oers and may adjust the sizing of the bonds by maturity year and then re-oer the bonds for purchase.
From page 61...
... Phase 3: Marketing and Placement of Individual Transactions 61   Method of Sale Issuer and Bond Pricing Method U SU A LL Y N EG O TI A TE D PTC: As is typical in negotiated sales, the underwriter will get member consensus of the syndicate to develop their own pricing views and interest rate spread from benchmark AAA rates across the maturity scale and different couponing strategies as appropriate. Simultaneously, the FA on behalf of the PTC develops its own pricing rules and then a negotiation takes place.
From page 62...
... 62 Guidebook for Effective Policies and Practices for Managing Surface Transportation Debt and the Arizona example (see Example 24) highlight that all issuers, regardless of the method of sale, work closely with FAs to determine the price of the bond, and that each issuer must navigate a dierent process to get approval to price the bonds.
From page 63...
... Phase 3: Marketing and Placement of Individual Transactions 63   sale, the notice of sale or information about the terms of the sale and the date should be widely distributed. 5.3.2 Leveraging Outside Professionals Issuers utilize a variety of approaches to effectively market individual transactions.
From page 64...
... 64 Guidebook for Effective Policies and Practices for Managing Surface Transportation Debt INFREQUENT ISSUANCES – TransactionBased Investor Engagement to Market Unique Issuances (Massachusetts) FREQUENT ISSUANCES – Continued Engagement to Promote the Value of the Program (PTC)
From page 65...
... Phase 3: Marketing and Placement of Individual Transactions 65   Example 26. Effective Webpage to Attract Investors (Ohio)
From page 66...
... Example 27. Effective Use of Presentations and Roadshows to Attract Investors (Virginia)
From page 67...
... Phase 3: Marketing and Placement of Individual Transactions 67   5.4 Meeting Closing Requirements and Guidelines 5.4.1 Key Decision-Making Factors: Closing Requirements and Strategy Issuers must adhere to prescribed national and state legal requirements when issuing debt on the municipal market. The MSRB provides guidelines on reporting requirements and maintains a market transparency system, which is an online data collection system, capturing municipal market transaction data for transparency, surveillance, and analytical purposes.
From page 68...
... 68 Guidebook for Effective Policies and Practices for Managing Surface Transportation Debt 5.4.4 Tool: Templates and Checklists e management of large amounts of rapidly changing information, typically during a very short period, oen requires the development of templates, checklists, and other organizational tools that are easy to implement on relatively short notice. Bond pricing and closing can be a stressful process, so tools that help to reduce complexity and last-minute decision-making can be extremely valuable.
From page 69...
... Phase 3: Marketing and Placement of Individual Transactions 69   Example 30. Closing Requirement Memos (NY MTA)

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