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2019: Starting with the Fundamentals
February 4, 2019
Happy 2019! Our blog is officially back after a brief break to close out 2018 and prep for this year. So many great things are coming, and we’ll keep you informed about it all here and on our podcast, which also returns this February.
Throughout 2019, we’ll continue to offer market commentary and analysis of the trends we think are important for issuers, advisors and investors. We also learned a TON last year about best practices and will continue to identify and share how these can be applied in MuniLand.
Today, we’re starting where we think we should start: with the fundamentals. The fundamentals of IR, that is. After spending a few years researching IR best practices, we’ve identified 10 competencies that every CFO or finance officer should develop as part of an effective IR program. The most important – and the one everyone should start with – is developing a strategic IR plan.
Investor relations is most effective when it’s a sustained program. Investors can choose from thousands of well-rated issuers and there are hundreds of new-issue sales every week. Developing a continuous IR program yields benefits – and you don’t get all the breakthroughs from one-off or disjointed IR activities like a single investor roadshow for one special bond sale.
Every issuer in the muni bond market must access capital for the next 50 or more years. IR strategies should reflect this long-term horizon. Issuers carry tremendous fiduciary responsibility and should always ask, “What steps can I take today to help ensure my municipality has access to low-cost capital in 5 years, 10 years or even 20 years?” Building a strategic IR plan will help you document these steps and see your progress.
We recommend issuers include their advisor and bankers in the process. Leverage the extended team to develop a strategy that helps achieve your long-term IR goals. Here are some great goals we’ve seen recently:
- Directly engage your largest bondholders
- Identify new institutional investors and a plan to reach them
- Find new ways to access non-traditional investors, such as local and retail investors
Overall, putting an IR plan and process in place will help you systematically expand and diversify your investor base. As the adage goes, “Plan your work and then work your plan”.
Top issuers who want to stand out in the bond market and have an edge over others should develop a written IR plan with goals, measure its effectiveness, and review and adjust it with their team at least once a year.
We’re excited to bring you much more on the 10 fundamentals and help you have an outstanding year. Stay tuned and here’s to a great 2019!