(HOUSTON, TX, November 20, 2023) — Harris County Industrial Development Corporation (“Harris County IDC”) is proud to announce the launch of their new investor relations website, marking a significant step toward greater transparency and improved communication with their valued stakeholders. The website, HarrisCountyIDC.com, serves as a dedicated platform to share Harris County IDC’s financial story and engage with investors.   This strategic initiative was made possible through a collaboration with BondLink, a leader in providing municipal issuers with debt management resources and cutting-edge digital tools for investor relations.   Harris County IDC's new website is designed to cater to a wide range of audiences, including existing bondholders, potential investors, financial advisors, and the general public. The platform offers a wealth of information, including details on the organization's debt programs, financial information, project updates, disclosures, bond ratings, and more.   Harris County IDC joins a growing list of prominent issuers who have recognized the importance of strengthening both their digital presences and investor relations. Notable entities on this list include the City of Dallas, City of Sugarland, Harris County Department of Education, Texas Water Development Board, Texas Department of Housing and Community Affairs, the University of Texas System, Dallas Area Rapid Transit (DART), California Pollution Financing Authority and Minnesota Higher Education Facilities Authority.   Art Smiley, President of Harris County IDC, expressed his enthusiasm about this significant development, stating, "Our new investor relations website demonstrates our commitment to transparency through our work to encourage employment and promote public welfare across the County and the State. All interested parties can now gain a deeper understanding of our organization and the financial programs we’re working so hard to support.”   Colin MacNaught, CEO and Co-founder of BondLink, also commended Harris County IDC's efforts, saying, "They have some really unique, important qualities that they’ve done a great job showcasing with their new IR website. The investment community appreciates this level of accessibility, and we’re excited to continue supporting Harris County IDC’s efforts to efficiently demonstrate their positive impact.”   For more information about Harris County IDC's finance programs and to explore their new investor relations website, please visit HarrisCountyIDC.com. Interested investors are encouraged to sign up for alerts to stay informed about future updates.   ###   About Harris County Industrial Development Corporation: Harris County Industrial Development Corporation (Harris County IDC) is a conduit issuer of debt on behalf of Harris County, Texas. Since its inception, Harris County IDC has issued over $750 Million in industrial revenue bonds with $225 Million currently outstanding. Harris County IDC is a domestic nonprofit corporation formed in the State of Texas on August 13, 1981. Harris County IDC operates under authority granted by Texas Government Code Chapter 501 on behalf of Harris County, Texas. Harris County IDC has the capacity to assist non‐governmental entities in developing new or expanding business enterprises through the issuance of tax-exempt Private Activity Bonds that comply with Chapter 501 and meet the requirements of the relevant Internal Revenue Code sections. About BondLinkBondLink, a cloud-based investor relations and debt management platform for the municipal bond market, helps issuers engage more bond investors through transparency and actionable insights. Founded by CEO Colin MacNaught, who spent seven years issuing nearly $25 billion in bonds on behalf of the Commonwealth of Massachusetts, and CTO Carl Query, BondLink went live in 2016. BondLink clients issued more than $48 billion in bonds in 2022. BondLink provides its issuer clients with tools to manage their capital financing programs more efficiently while providing investors with the interim financial reports and data they need to close information gaps and make informed decisions through a single platform. The company is backed by top investors within the municipal bond market, including Intercontinental Exchange and Franklin Templeton. Headquartered in Boston, BondLink was recently named to the 2023 GovTech 100, marking its fifth consecutive appearance on the annual list.   BondLink Contact Information:Colin JacobDirector of Marketingcjacob@bondlink.com   

  (SACRAMENTO, CA, November 9, 2023) — The California Pollution Control Financing Authority (“CPCFA”) today announced the debut of CPCFAbonds.com, a newly developed investor relations website. In partnership with BondLink, CPCFA has crafted this website as a hub for citizens, existing bondholders, private companies, and potential investors to access comprehensive financial reports and updates related to their conduit activity.   CPCFA, as a part of the State Treasurer's Office, recognizes the importance of providing a centralized and controlled source of information for their capital programs. CPCFA plays a significant role within the State’s environmental and financial landscape, and this innovative platform can scalably satisfy the large interest in their mission-driven programs.   “CPCFA is a critical part of California’s work to make our communities cleaner and more sustainable,” said Treasurer Ma. “This website will help CPCFA gain visibility among bond issuers and investors, and give all Californians and stakeholders an easy-to-access, single source for information about their conduit services for solid waste, recycling, and water-related projects.”   “Being transparent about our goals, the finances to help us achieve them, and our results is incredibly important,” stated Shela Tobias-Daniel, Executive Director CPCFA. “We’re steadfast in our commitment to creating a cleaner, greener California that’s ready for the future, and our new partnership with BondLink will empower us to access capital more effectively for our initiatives.”   To navigate today’s heightened market volatility, an expanding number of proactive and forward-thinking issuers have embraced similar investor relations strategies with BondLink. These include the State of California, County of Sacramento, San Francisco Public Utilities Commission, West Basin Municipal Water, Los Angeles County, University of California, and the California Department of Water Resources.   Colin MacNaught, CEO and Co-Founder of BondLink, shared his enthusiasm for the partnership, stating, "The Authority has done incredible work for over 50 years. We’re proud to help modernize their investor engagement and support them as they continue contributing to valuable causes across the State.”   For further details aboutCPCFA’s programs, upcoming bond sales, and historical financials, please visit CPCFAbonds.com. Investors are encouraged to sign up for updates to stay in the know. ###   About the California Pollution Control Financing Authority Created in 1972, the California Pollution Control Financing Authority’s original purpose was to provide access to the tax-exempt bond market for private companies serving a public purpose in the pollution control sector. Over the years CPCFA has evolved to provide businesses access to capital from a variety of sources and through a variety of financing mechanisms. As a “conduit issuer” of tax-exempt private activity bonds, CPCFA is able to facilitate low cost financing to qualified solid waste and recycling projects, as well as water furnishing and wastewater projects. Examples of recent assistance include projects to purchase clean-air vehicles by waste companies, construct and operate anaerobic digesters, recycle used oil, convert animal waste to clean burning fuel, and develop construction and demolition debris recycling programs. Bonds issued under this division shall, whenever practical, be aligned with generally recognized principles and best practice guidelines for financing climate mitigation, adaptation or resilience projects. About BondLinkBondLink, a cloud-based investor relations and debt management platform for the municipal bond market, helps issuers engage more bond investors through transparency and actionable insights. Founded by CEO Colin MacNaught, who spent seven years issuing nearly $25 billion in bonds on behalf of the Commonwealth of Massachusetts, and CTO Carl Query, BondLink went live in 2016. BondLink clients issued more than $48 billion in bonds in 2022. BondLink provides its issuer clients with tools to manage their capital financing programs more efficiently while providing investors with the interim financial reports and data they need to close information gaps and make informed decisions through a single platform. The company is backed by top investors within the municipal bond market, including Intercontinental Exchange and Franklin Templeton. Headquartered in Boston, BondLink was recently named to the 2023 GovTech 100, marking its fifth consecutive appearance on the annual list.   BondLink Contact Information:Colin JacobDirector of Marketingcjacob@bondlink.com   

Caribbean Country launches industry-leading investor relations (IR) platform to centralize information for investors (Nassau, The Bahamas, November 7th, 2023) — The Commonwealth of the Bahamas is proud to unveil its latest initiative, their new investor relations website https://mof-investor-relations.gov.bs.This innovative platform, developed in collaboration with BondLink, the leading cloud-based investor relations and debt management provider for the bond market, will centralize the latest financial news, project updates, reports, and more pertaining to its bond programs. The Bahamas will bolster its investor outreach, enhance the transparency of its bond offerings, and streamline its disclosure process with this new technology. Through https://mof-investor-relations.gov.bs, the Bahamas will consolidate crucial financial information, enabling current and prospective bondholders to make more confident decisions. “This new property serves as a pivotal tool in The Bahamas’ commitment to attract new investors and effectively disseminate information,” said Philip Edward Davis, Prime Minister and Minister of Finance for The Bahamas. “Leveraging technology to expand our investor outreach and improve our transparency will benefit our bond program and ultimately our citizens.”BondLink has an established track record of powering investor transparency initiatives for esteemed entities such as The Commonwealth of Puerto Rico, State of Florida Division of Bond Finance and various cities and counties, including Washington D.C., State of California and more. "We are proud to collaborate with the Ministry of Finance in The Bahamas.  Their proactive approach to investor outreach and engagement will resonate with investors, who increasingly demand transparency and accessibility," said Colin MacNaught, CEO and co-founder of BondLink.  "We look forward to partnering with The Bahamas as they expand their robust investor relations program." For more information about The Bahamas’ new transparency initiative and upcoming bond sales, please visit https://mof-investor-relations.gov.bs.  About BondLinkBondLink, a cloud-based investor relations and debt management platform for the municipal bond market, helps issuers engage more bond investors through transparency and actionable insights. Founded by CEO Colin MacNaught, who spent seven years issuing nearly $25 billion in bonds on behalf of the Commonwealth of Massachusetts, and CTO Carl Query, BondLink went live in 2016. BondLink clients issued more than $48 billion in bonds in 2022. BondLink provides its issuer clients with tools to manage their capital financing programs more efficiently while providing investors with the interim financial reports and data they need to close information gaps and make informed decisions through a single platform. The company is backed by top investors within the municipal bond market, including Intercontinental Exchange and Franklin Templeton. Headquartered in Boston, BondLink was recently named to the 2023 GovTech 100, marking its fifth consecutive appearance on the annual list.   BondLink Contact Information:Colin JacobDirector of Marketingcjacob@bondlink.com   

Los Angeles partners with BondLink to streamline delivery of financial information to professional & retail investors (LOS ANGELES, CA, October 19, 2023) — The City of Los Angeles (“the City”) today announced the unveiling of CityofLosAngelesInvestorRelations.bondlink.com, a cutting-edge investor relations website dedicated to fostering even greater financial transparency and engagement with their valued stakeholders. In partnership with BondLink, the City developed this platform to serve as a central hub for citizens, current bondholders, and potential investors. The website provides comprehensive insights into the City's debt programs, finances, disclosures, bond ratings, anticipated bond offerings, and more. They join a large and growing list of major issuers in California committing to stronger investor relations while accessing the particularly volatile municipal market that 2023 has presented, including the State of California, Los Angeles County, San Diego Association of Governments (SANDAG), San Francisco Public Utilities Commission, California Department of Water Resources, and Los Angeles County Metro Transit Authority. Key to this initiative has been the support of Matthew W. Szabo, City Administrative Officer, whose office manages and structures debt issuances and oversees the City’s debt programs. Mr. Szabo stated, "This new website exemplifies our commitment to strong financial management and improves access to our government. We are providing tools to empower both institutional and retail investors to gain greater confidence in our organization, benefitting our debt and capital programs well for years to come.” “The City achieved a great balance with this new, dedicated IR site, providing institutional investors with the depth of information they desire in a format that’s easily accessible for the retail buyers in the State,” said Colin MacNaught, CEO and Co-founder of BondLink. “We’re excited to support their efforts and look forward to further showcasing their impactful initiatives.” For more information about the City’s finance programs, please visit CityofLosAngelesInvestorRelations.bondlink.com. Investors are encouraged to sign up for alerts to stay in the know about future updates.   ### About the City of Los Angeles The City of Los Angeles is the second most populous city in the United States, with an estimated 2023 population of 3.8 million. Founded in 1781, Los Angeles is the principal city of a metropolitan region stretching from the City of Ventura to the north, the City of San Clemente to the south, the City of San Bernardino to the east, and the Pacific Ocean to the west. The City’s 470 square miles contain 11.5 percent of the area of the County of Los Angeles, California (the “County”) and approximately 39 percent of the population of the County. Tourism and hospitality, professional and business services, direct international trade, entertainment (including motion picture, television and digital media production), and wholesale trade and logistics all contribute significantly to local employment. Emerging industries are largely technology driven, and include biomedical technology, digital information technology, environmental technology and aerospace. As home to the film, television and recording industries, as well as important cultural facilities, the City serves as a principal global cultural center.About BondLinkBondLink, a cloud-based investor relations and debt management platform for the municipal bond market, helps issuers engage more bond investors through transparency and actionable insights. Founded by CEO Colin MacNaught, who spent seven years issuing nearly $25 billion in bonds on behalf of the Commonwealth of Massachusetts, and CTO Carl Query, BondLink went live in 2016. BondLink clients issued more than $48 billion in bonds in 2022. BondLink provides its issuer clients with tools to manage their capital financing programs more efficiently while providing investors with the interim financial reports and data they need to close information gaps and make informed decisions through a single platform. The company is backed by top investors within the municipal bond market, including Intercontinental Exchange and Franklin Templeton. Headquartered in Boston, BondLink was recently named to the 2023 GovTech 100, marking its fifth consecutive appearance on the annual list.   BondLink Contact Information:Colin JacobDirector of Marketingcjacob@bondlink.com   

BondLink has grown by leaps and bounds since its inception. It started out targeting state and local government issuers, and has branched out into all things muni. Its latest gain is a Washington state issuer of single-family housing bonds.

WSHFC partners with BondLink to bolster transparency and engage potential investors (SEATTLE, WA August 29, 2023) — The Washington State Housing Finance Commission (WSHFC) is pleased to announce the launch of WSHFCbonds.bondlink.com, a new investor relations website focused on its single-family bonds. Developed in collaboration with BondLink, the website aims to provide the community, existing bondholders, and prospective investors with convenient access to comprehensive financial insights concerning the Commission’s single-family debt program.The website’s introduction coincides with preparations for a forthcoming single-family bond issuance. These funds will play a pivotal role in supporting the Commission’s affordable home loans for low- and moderate-income families across the state of Washington.“We take pride in our mission-driven work to make housing more accessible to our citizens,” said Fenice Taylor, Senior Finance Director. “This level of transparency, and ease of communicating with investors, that we’re now able to achieve with BondLink will undoubtedly help us direct capital toward our home-loan programs even more effectively.”The new, focused website will allow WSHFC to centralize investor access to financial information and documentation relating to its single-family bond financing programs. BondLink successfully collaborates with other housing agencies across the country, including Illinois Housing Development Authority, DC Housing Finance Agency, and Texas Department of Housing and Community Affairs, in addition to surrounding municipalities like King County, WA and the State of Oregon.Colin MacNaught, CEO and Co-founder of BondLink, expressed enthusiasm about the partnership, stating, "It’s so rewarding to see a finance team like the Commission’s recognize the impact that coordinated, structured investor engagement can have on their bond programs. We’re really proud to power their transparency initiatives and look forward to supporting them every way we can moving forward.”For additional information regarding WSHFC's new single-family investor relations website and updates regarding the upcoming single-family bond issuance, please visit WSHFCbonds.bondlink.com. ###About Washington State Housing Finance Commission The Washington State Housing Finance Commission is a publicly accountable, self-supporting team, dedicated to increasing housing access and affordability and to expanding the availability of quality community services for the people of Washington. The Washington State Housing Finance Commission (the Commission, WSHFC) was created in 1983 by the legislature of the State of Washington (the State) to “act as a financial conduit which, without using public funds or lending the credit of the state or local government, can issue nonrecourse revenue bonds and participate in federal, state, and local housing programs thereby making additional funds available at affordable rates to help provide housing throughout the state.” The state legislature later authorized the Commission to issue bonds to finance or refinance nursing homes and capital facilities owned and operated by nonprofit corporations, beginning farmers/ranchers, sustainable energy and energy efficiency retrofit programs. About BondLinkBondLink, a cloud-based investor relations and debt management platform for the municipal bond market, helps issuers engage more bond investors through transparency and actionable insights. Founded by CEO Colin MacNaught, who spent seven years issuing nearly $25 billion in bonds on behalf of the Commonwealth of Massachusetts, and CTO Carl Query, BondLink went live in 2016. BondLink clients issued more than $48 billion in bonds in 2022. BondLink provides its issuer clients with tools to manage their capital financing programs more efficiently while providing investors with the interim financial reports and data they need to close information gaps and make informed decisions through a single platform. The company is backed by top investors within the municipal bond market, including Intercontinental Exchange and Franklin Templeton. Headquartered in Boston, BondLink was recently named to the 2023 GovTech 100, marking its fifth consecutive appearance on the annual list.   BondLink Contact Information:Colin JacobDirector of Marketingcjacob@bondlink.com   

City partners with BondLink to bolster transparency and attract new investors. (DURHAM, NC, August 16, 2023) — The City of Durham, North Carolina, is proud to announce the launch of its new investor relations website, CityofDurhamBonds.BondLink.com. Developed in collaboration with BondLink, the innovative website will provide the community, current bondholders, and future investors with easy access to comprehensive financial information about the City’s debt and capital programs. As part of Durham’s commitment to continuous improvement and development, the website launch comes ahead of a bond sale to support various projects that will enhance the city's infrastructure, promote sustainable growth, and strengthen the community.Durham's exemplary financial standing sets it apart as one of the 44 cities nationwide rated AAA by S&P, Moody's, and Fitch. This prestigious AAA rating signifies the highest level of creditworthiness and reflects Durham's robust financial management practices and prudent fiscal policies. "Our AAA rating is a testament to our city's financial stability and responsible management of public funds. We’re always looking for ways to advance these practices and be a leader across all aspects of our operations,” said Finance Director and Chief Financial Officer Tim Flora with the City of Durham. "By partnering with BondLink to launch our new investor relations website, we’re aiming to attract a broader range of investors, particularly local retail buyers, who share our commitment to socially responsible initiatives.” BondLink, the leading cloud-based investor relations and debt management platform for the municipal bond market, will enable Durham to provide investors with a centralized platform to access critical financial data and documentation related to its financing programs. BondLink has successfully collaborated with surrounding municipalities, including Lincoln County, Johnston County, and the City of Charlotte.Colin MacNaught, chief executive officer and co-founder of BondLink, expressed his excitement about the partnership stating, "Durham's dedication to financial transparency and its stellar AAA rating make it a standout city in the municipal bond market. We’re thrilled to work closely with their treasury team to enhance their investor relations strategy and help them attract a diverse group of investors. This collaboration serves as an inspiring model for other cities to follow suit and optimize their financing programs."For more information about Durham's new investor relations website and updates on the upcoming bond sale, visit CityofDurhamBonds.BondLink.com.###About the City of DurhamWhile the City of Durham, now the fourth largest city in the state, was once known as a banking and tobacco center, many other industry sectors have been drawn to the city over time. With the birth of the Research Triangle Park (RTP) in the 1950s, Durham began to take on a new look that has evolved this region into a global center for information technology, biotechnology, pharmaceuticals, manufacturing, and medicine.Durham is famously known as the “Bull City” due to its origins in tobacco manufacturing as well as the “City of Medicine” since healthcare is a major industry including more than 300 medical and health-related companies and medical practices. Between 1900 and 1925, two well-respected educational institutions were founded, North Carolina Central University and Duke University. These institutions have established Durham as a city of high academic acclaim, producing well-qualified candidates for the various industries that call Durham home.Durham's credit position is excellent. There are approximately 22,500 cities in the U.S. and currently Durham is one of only 44 cities nationwide to receive the top-level AAA credit rating from all three major national bond rating agencies, Standard & Poor’s, Moody’s, and Fitch. This rating makes the City of Durham one of the highest-rated public entities in the United States. For more information, visit www.durhamnc.gov and connect on social media.About BondLinkBondLink, a cloud-based investor relations and debt management platform for the municipal bond market, helps issuers engage more bond investors through transparency and actionable insights. Founded by CEO Colin MacNaught, who spent seven years issuing nearly $25 billion in bonds on behalf of the Commonwealth of Massachusetts, and CTO Carl Query, BondLink went live in 2016. BondLink clients issued more than $48 billion in bonds in 2022. BondLink provides its issuer clients with tools to manage their capital financing programs more efficiently while providing investors with the interim financial reports and data they need to close information gaps and make informed decisions through a single platform. The company is backed by top investors within the municipal bond market, including Intercontinental Exchange and Franklin Templeton. Headquartered in Boston, BondLink was recently named to the 2023 GovTech 100, marking its fifth consecutive appearance on the annual list.  

New investor website www.ctabonds.com will be used to attract more municipal bond investors

Energy provider to Oklahoma's municipally-owned electric systems adopts innovative technology to attract investors

City of Flint, Michigan Announces New Investor Transparency Website to Increase Financial Transparency.

Texas school bond guarantee program capacity falls below $27 million

Over the last several weeks I’ve had the opportunity to join multiple issuer presentations to institutional investors. These are a longstanding practice in our market that continue to be beneficial for many issuers, and they’ve taken different shapes over the years. Virtual roadshows and newer technologies like Zoom were vital to issuers engaging investors during the difficult COVID period of 2020 and 2021 when in-person meetings were near impossible. That COVID period also included extraordinarily Federal support for the muni market, which pushed rates and spreads to lows and reduced some urgency around investor meetings. The choppiness of the bond market in 2022, along with the reduced COVID risk, produced one notable silver lining: the return of in-person issuer investor presentations. After sitting in on a number of these recently, I came away with some refreshed thoughts.  I think these can be invaluable in terms of making a general connection with your bondholders. For investors, these are incredible opportunities to go deep on a topic with a CFO or state budget director. A recent poll conducted by Corbin Advisors found that a whopping 87% of investors look forward to the flexibility around a live Q&A with the issuer, and 83% pay close attention to presentations conducted by leaders outside of CEO & CFO roles. It can be so much easier and impactful for investors to consume information in this way vs. constantly relying on reading flat documents online.  The ability for issuers to respond is a big part of how investors are evaluating management as part of their broader credit review, too. It’s equally important for issuers to effectively communicate their stories to investors during these valuable in-person periods, along with proactively presenting content that addresses topics, concerns, questions, etc. that are top of mind for investors in the room. Overwhelmingly, investors want issuers to address their long-term strategy, capital allocation priorities, and long-term targets.  But in-person investor events are still going to be rare going forward – they’re time consuming and can be expensive for issuers. So, what are the keys to maximizing your limited time with investors? How do you take your investor meeting from good to great, to borrow from Jim Collins, so you make all that time, effort, and capital worth it? The National Investor Relations Institute (NIRI) has a lot of good resources on this topic on their website. If you have an investor meeting planned for 2023, or are thinking about adding one into the mix, this virtual presentation from NIRI can be worth your time.  

2022’s muni bond market presented a number of challenges to issuers.To start, interest rates ended up significantly higher over the course of the year. Issuers also experienced a series of sudden, acute swings in rates, particularly in periods of the year when supply (bond issuance) tends to be the most robust.  And despite credit in investment grade sectors remaining generally solid due to federal support and red hot economic activity, pricing spreads on new issue bonds also widened from prior years as investors were much more selective given the outflows they had to manage and periodic swings in rates. These market challenges were a shock to the system given how issuer-friendly the bond market has been over the last roughly twenty years: characterized by low rates, tight pricing spreads, and a consistent investor demand.  This all added up to a market where price discovery was murky at best.  What do I mean? If you were an issuer with a competitor sale in a week, it would be difficult to have a high degree of confidence as to where your bonds would price or what the market was determining as the fair price for bonds. With the Fed expected to keep hiking rates at least through Q2 of 2023, these conditions are expected to remain a challenge for public sector CFO’s and debt managers. We’ll cover in subsequent blogs what some issuers are doing to adjust to this new normal.  

Happy 2023 to everyone in #muniland!   As the calendar flips over, just about everyone takes some time to reflect on the past year to assess what was and to envision the year ahead. We’ll be doing that over the next few blogs. Before we pull out silver linings from a 2022 market that was brutal to most bond investors and issuers, let’s look at some forecasts of what may be to come.  Bloomberg has a very comprehensive survey of all major banks and asset managers for different facets of the capital markets, from forecasts of growth and inflation to expected monetary policies.  Most forecasts seem to see 2023 as a tale of two halves. Markets are likely to first focus on higher rates until the Fed pauses its rate hikes in March at either 5% or 5.25%. Because inflation is expected to persist, forecasts are not factoring in rate reductions even when economies start to experience negative growth. Here is the survey. Closer to “home”, Bloomberg’s Eric Kazatsky hosted an excellent podcast last month with three of the top strategists in the muni bond market: Peter Degroot, Head of Municipal Research and Strategy at JP Morgan; Vikram Rai Head of Municipal Strategy at Citi; and Mikhail Foux Head of Municipal Research at Barclays.  To sum, these strategists are expecting muni bond supply of $375 billion (JP Morgan) on the low end to $450 billion (Citi) on the high end. Total supply is held back by the lack of refunding opportunities, especially the lack of taxable refundings to take out tax-exempt bonds. I encourage all to listen to the December edition of “Masters of the Muniverse” on Apple Podcasts.  

This is BondLink's 5th consecutive year being named to the list, which highlights the top companies delivering innovative solutions to support state and local governments across the United States.

Great lessons from the Golden State. It’s only fitting that BondLink held one of our largest events of the year in the State established as one of the largest muni issuers in the country - California.  A packed room full of muni finance professionals came to Los Angeles County to hear what’s top of mind for local issuers, gain insights from leading investors in the State, and spend some rare quality time outside of transactions with one another.  To put it modestly, an impressive speaker lineup was assembled to address the group: Keith Knox, Treasurer, Los Angeles County  Dan Wiles, Assistant Treasurer & Tax Collector, Los Angeles County Allen Li, Managing Director Municipal Bonds, Guggenheim Partners Marla Bleavins, CFO, Deputy Executive Director of Finance & Administration, Port of Los Angeles Tatiana Starostina, Chief Financial Officer, Los Angeles World Airports Rodney Johnson, Deputy Executive Officer, Finance, Treasury, Los Angeles County Metropolitan Transportation Authority Adam Bauer, President and Chief Executive Officer,  Fieldman, Rolapp & Associates Sam Smalls, Treasury and Debt Manager, Metropolitan Water District of Southern California Jon Schotz, Co-Managing Partner, Saybrook Fund Advisors, LLC The skies may have been cloudy on Wednesday, but the lessons were clear. Here were some of the best points made from our speakers throughout the day. 1. Issuers can benefit from making financial information more accessible and more timely Plainly put - investors are doing more research with fewer resources. Volatility has now been a key theme in our market for months. As some municipalities are flush with cash from various sources, other obligors are facing tougher times with restricted budgets and darker outlooks. Leaner research teams on the buyside are being forced to execute more difficult surveillance, and it’s common to hear that a buyer will pass on a bond offering simply because they can’t find the necessary information in time to make a decision.  That’s why it’s more important than ever for issuers to make their information as easy to find and accessible to all. Issuers who make it easier for investors to find financial reports, operating documents, and more on a consistent basis stand a good chance to earn lasting, beneficial goodwill with the buy-side. Speakers like Los Angeles County, Los Angeles Metro, and the Port of Los Angeles are all doing exactly that with their investor relations programs. 2. Everything “green” is still evolving More issuers are experimenting with green-labeled bonds, more thorough sustainability reports, and other dedicated efforts to report on specific ESG credit factors. A consistent result of these efforts has been increased investor interest, which can have multiple benefits on an issuer’s capital program.  While some pundits will say that all municipal bonds are in some fashion sustainable, bond investors appreciate the explicit messaging around an issuer’s environmental or sustainable goals. Finance officers interested in exploring the green bond market should observe how other issuers are handling ongoing reporting around the environmentally beneficial projects that are funded by green bonds.  In the meantime, what’s the most important thing we can all do? Ensure that all your information is reaching the market, so all interested parties can have informed conversations and make educated decisions. 3. Build and rely on a strong network Something that really stood out is how every speaker mentioned at least one valuable piece of knowledge they’ve learned from a close peer in our market.  As the bond market continues to grapple with higher rates, lowering of investor demand, and volatility, it's crucial to stay in the know with how other issuers are approaching their capital financing needs. Through trade associations like the GFOA, issuers can tap their network for valuable approaches. You never know what creative strategy, financing structure, or investor outreach step might benefit your bond program.  Governments in the muni bond market will be challenged more than ever in 2023. BondLink is committed to initiating more conversations like the ones we had in Los Angeles County last week so we can all approach the bond market with greater confidence.

New transparency will expand reach of bond sales with investors

North Carolina County announces new technology to attract investors to municipal bond programs

BondLink has hired industry veteran Bill Fazioli as its first ever regional director of issuer solutions.

The Goldman Sachs Group has appointed Kevin R. Johnson as an independent director of the firm. Johnson will also become a member of each of the firm’s Governance, Compensation and Risk Committees.

Industry-leading investor relations (IR) platform hires Bill Fazioli to meet the needs of evolving market

Elementary school district in Arizona announces new transparency website for municipal investors

Like many events, Boston Fintech Week was forced to pivot to a virtual event during the COVID-19 pandemic. But this year, the in-person event returned, bringing a renewed buzz and excitement to the fintech space.

Industry-leading investor transparency platform recognized by financial technology awards ceremony

New investor website www.stateofcoloradofinancings.bondlink.com will be used to attract more bond buyers for the State's bonds starting in September 2022.

Working with the fintech company BondLink, the district has launched a website to increase transparency into how bond dollars are being spent and to track investor interest for possible future reference.

Industry-leading investor relations (IR) platform hires four public finance veterans to meet the needs of evolving municipal bond market

Fort Worth ISD today announced a new tool to help ensure transparency and attract more investors to the District’s upcoming $150 million bond sale.

Retail investors, whether through mutual fund holdings or individual bond portfolios, are the largest holders of municipal bonds. While mutual funds often drive primary market demand in our market, individual holdings from Separately Managed Accounts (SMAs) or retail buyers can both boost demand for your deals and increase the diversity of your holders. Investors withdrew $5.53 billion from municipal bond mutual funds in the week ended April 20, according to the Investment Company Institute (ICI). The prior week saw outflows of $7.23 billion.  If successful, a retail-friendly marketing approach can help offset the diminished demand from institutional investors when fund outflows like these occur.  Utilizing a dedicated investor relations (IR) website, such as the ones used for decades by corporate issuers, can help issuers cost-effectively, and efficiently, engage retail investors ahead of their next sale. These are easy tools that any government should be using to boost their overall transparency.  By “engage”, I mean having a strong digital presence with an IR website that’s appealing to institutional and retail buyers, easily found via Google, and makes it  easy for investors to be notified of future bond sales.  Capturing organic inbound interest and distributing outbound communications may be new concepts to many issuers, but they’re essential strategies in today’s digital age.  Issuers, both large and small, have found the value of using IR websites to market to retail investors ahead of a bond sale, and developed significant distribution lists of these buyers that can be used again and again for future bond sales.  Connecticut Green Bank does an exemplary job of appealing to retail investors.  We know anecdotally that retail likes to buy local, like investing in a project or in a community that they’re familiar with. They also tend to be so-called “buy-and-hold” buyers.  But these individual buyers have different levels of sophistication. Some retail buyers may not know how to place an order for your bonds. Even those who are capable of purchasing your bonds may miss the deal because of how quickly they come and go in a single morning. As a result, issuers experience less demand and individuals are often left to the secondary market where they pay more for bonds than during its initial offering.  While it can take a lot of smaller orders to amount to the order size of a portfolio manager at a mutual fund, cultivation of retail over time can provide investor diversity and better pricing than when solely focused on institutional demand from funds.  A strong IR website that makes financial information easy to find and raises awareness ahead of your deals is crucial to build that diversity over time. Below are a couple of best practices we’ve heard from our top issuer-clients who have successfully engaged retail investors for their bond sales. We encourage you to review with your Municipal Advisor and Bond Counsel to see if there is a fit for your bond program:  1. Announce your bond sale as early as possible by providing notice of the sale on the forward calendar on your IR website. In other words, give individual investors as much time to consider the bond offering as possible. 2. Once a preliminary official statement is developed, post it at least two weeks before your bond sale on your IR website. Two weeks is better than one week. Leveraging your free, open-access government or IR website enables you to raise awareness amongst both traditional and non-traditional investors. 3. Send out a press release to local media outlets who are more likely to pick up the news about your sale. This can be coupled with any announcement of your bond ratings assigned to the deal. If you’re lucky enough to have one, don’t hesitate to work with your internal communications team to do this!  4. Take advantage of your social media presence. In addition to a traditional press release, announce your sale via social media. Most governments have social media accounts with thousands or tens of thousands of followers. Not only is this being transparent, but it's casting a wider marketing net for potential non-traditional investors. 5. Digital investor roadshows can be very helpful to investors, including retail, and can be a central component of a retail marketing push. Roadshows can be a tool to provide context behind the bond offering, and should be considered with the guidance of the Municipal Advisor and Bond Counsel. 6. Provide rating agency reports, which can be hard for retail to otherwise access. Investors constantly ask to receive the same information that issuers provide to rating agencies so that they can make their own judgments.  7. Show where or how the bond proceeds are expected to be used. If there are photos or other descriptions of the projects being funded, consider showing those on your IR website. 8. Provide information on your IR website on how individual investors may buy your bonds. No issuer is a broker dealer, and thus bonds have to be purchased through the bank underwriting your sale. But providing contact information for the banks involved could be very helpful to investors unaccustomed to buying bonds in the primary market. If you recognize the importance of retail buyers and make simple, incremental changes to appeal to them, we’re confident you’ll reap the benefits in the future. Start considering these options today, speak with your finance team, and find out where you can begin.   

BondLink’s online network connects municipal issuers with bond investors, advisors and other essential market participants.

BondLink has partnered with InspereX to connect issuers to independent registered investment advisors by directly linking BondLink's investor relations pages with InspereX's BondNav platform.

BondLink has launched an environmental, social, and governance solution aimed at improving how municipal issuers can highlight how they're addressing current ESG credit risks and showcase their specific green bond programs to investors.

This is BondLink's 4th consecutive year being named to the list, which highlights the top companies delivering innovative solutions to support state and local governments across the United States.

BondLink, the Boston-based financial technology company that provides cloud-based debt management software solutions to issuers, added two industry experts to its board of directors.

They're taking increasingly proactive, if piecemeal, steps toward making their communities ready for extreme weather and pollution scenarios that once seemed unimaginable.

Over the past year, a number of hot topics in #muniland have evolved to touch on both investor relations and legal disclosure. In order to help issuers better understand these emerging issues, we co-hosted a four-part webinar series in June with Nixon Peabody, a leading bond and disclosure counsel in the municipal bond market.  Four webinars in a month required a lot of coordination, but it was worth it for everyone who was able to tune in: the conversations we facilitated amongst issuers, bond investors and counsel uncovered valuable new practices and other take-aways for issuers of all sizes, sectors, and levels of sophistication.  Here’s what we heard: 1. Digital channels matter more today Established issuers like Darryl Street (the District of Columbia) and Lisa Eisenberg (Ohio Treasurer of State) discussed how they utilize modern communication channels to reach investors. It’s never been easier to communicate your story with bond investors, and for investors to consume it, thanks to tools like social media (LinkedIn, Facebook, Twitter, etc.) and IR websites.  Issuers can effectively market a bond sale by efficiently distributing data, being more transparent, and controlling one’s credit story on these specific properties. On the investor side, we heard that buyers of all sizes rely on digital channels to learn more about issuers, whether or not the issuers are intentionally sharing information.  Investor information extends to all information that’s reasonably expected to reach investors, and Nixon’s Jade Turner-Bond shared her perspective that developing a disclosure process is just as important as the disclosure itself. If issuers aren’t providing enough information to make an investor confident, they’ll look elsewhere and potentially find competing or negative information that’s outside of your control.  The final take-away is that communicating with the market is a process, not an event, and it doesn’t stop at the POS. Many issuers across the country are already experiencing the benefits of more robust, timely, and regular disclosures.   2. Ongoing project updates will be crucial for ESG opportunities For our second webinar, Issuer Disclosure Requirements for Selling ESG, Sustainable Bonds, we heard from Jenna Bryan-Krug of BlackRock, James McIntyre of New York State Homes & Community Development, and Liz Columbo of Nixon Peabody. This discussion was extremely timely as ESG continues to remain top of mind with bond investors as well as regulators like the SEC, and each market participant brought their own perspective.  However, all the speakers agreed that issuers have generally focused more on the pre-sale process of demonstrating “green-ness” than on the post-issuance process.  Developing a process to surface project updates for bond investors over the duration of your offerings is a great way to boost general disclosure and generate a positive sentiment around most issuers’ ESG disclosure. James McIntyre outlined his process for developing direct relationships with investors. His program has benefited greatly by “following the money” to raise investor demand for his sustainable and social bond program issues, and he encouraged issuers to have more fluid, candid conversations with the buy-side.   3. Issuers should maintain processes to control their credit story The third webinar focused on the evolving practice of voluntary disclosures to bond investors. David Erdman, State of Wisconsin, joined Anne Ross of the NFMA to unpack how voluntary disclosure evolved in 2020, spurred on by some key actions by the SEC after the onset of COVID-19.  Early on in the COVID-19 emergency, the bond market’s primary activity ground to a halt and issuers were largely silent on the pandemic’s impact. This was very difficult for bond investors who were dealing with redemptions and needed to quickly decide which bonds to sell and which to hold.  Later in the emergency, the use of voluntary disclosures by issuers accelerated. Julie Seymour of Nixon Peabody analyzed how this was likely driven by the encouragement of the SEC’s May 2020 joint statement.  Investors welcomed any communications from issuers throughout the year, whether it involved new information or was simply an update to detail when they could expect more substantial disclosures. From the buy-side perspective, it became clear that issuers with an existing investor relations program were able to easily provide continual updates to investors; those who did not have an IR website or investor communications process struggled.  The key take-away: in an emergency, publicly available information about an issuer/organization can get ahead of a formal investor disclosure. Issuers should be aware of that persistent risk and have a process in place to communicate with the market to control the credit story.   Thanks again to everyone who was able to attend any of the sessions, and to all of our speakers who contributed their time and thoughts.  You can find links to recordings of all these webinars here. We hope to see you at our future events.   

Intercontinental Exchange is putting its chips down on the startup, which helps government agencies issue bonds. The two companies are also partnering to put more data in the hands of public officials.

Intercontinental Exchange, Inc. has invested in BondLink in a deal that will provide ICE Data Services' data sets to BondLink's municipal issuer clients, a move both firms say will bolster transparency and arm issuers with a better understanding of market conditions as they price deals.

Sarah Wynn has a great article in The Bond Buyer about a bi-partisan push to bring back direct-pay bonds as part of an infrastructure stimulus bill. Similar to the popular Build America Bonds (BABs) authorized by President Obama for stimulus in 2009 and 2010, the new version of direct-pay bonds would include a subsidy rate of 28% and would be exempt from sequestration. As with BABs, the issuer would receive a direct payment from the federal government to cover a percentage of the interest costs associated with the taxable bonds. Sequestration is a big matter for issuers, as many feel burned by the federal government after reimbursement levels in the initial BABs program were reduced many years after the program was instituted. The actual subsidy levels, though, are a matter of policy. Issuers in #muniland will want to see as high of a subsidy level as possible. But Congress could prioritize different types of infrastructure projects over others. For example, Oregon Senator Ron Wyden has proposed a direct pay subsidy of up to 70% for so-called clean energy bonds. Here’s more on that proposal here.  From my perspective, bringing back direct-pay bonds would be a significant tool for issuers to reduce their borrowing costs, tap new taxable private capital, and finally start accelerating infrastructure projects across the country. It is important to note that not all issuers took advantage of the initial BABs program by issuing direct-pay bonds in 2009 and 2010. But all issuers benefitted from that program, as tax-exempt yields nose-dived when billions of dollars in supply shifted to taxable markets. I expect the same would happen again if this sort of program was brought back in 2021. 

The GFOA Committee on Governmental Debt Management recently released an excellent, and timely, best practice on ESG disclosure. As hazards become more apparent in our everyday lives, both investors and rating agencies are spending more time assessing the risks an issuer might face from environmental, social and governance policies. Here’s a link to the full best practice. In the guidance published this March, the Committee recommended that issuers take proactive – and voluntary – steps to document risks they’re anticipating and/or measuring. Further, it recommends that issuers share the policies adopted to address those risk factors and circulate them for both primary and secondary market disclosures. This best practice shows that the muni market can be driven and nimble on disclosure matters. The importance of ESG disclosure has quickly grown for bond investors over the last few years. Just last month, the Securities and Exchange Commission announced the creation of a climate and ESG task force in its enforcement division to find ESG-related misconduct. This comes on the heels of acting SEC Chair Allison Herren Lee directing the SEC Division of Corporate Finance to increase its focus on climate-related disclosures in company filings.This best practice is a great step, and the GFOA should be commended for its leadership as this guidance will influence its thousands of members. Impact investing is still evolving, including the use of common definitions, metrics, reporting standards, etc. Notices like this will help cement the urgency behind ESG considerations and hopefully foster more widespread adoption of these practices.As “social” and “governance” risks catch up to the more-easily measurable “environmental” risks, this guidance, and more like it, will act as a great foundation for the municipal market to lead on ESG disclosure.  

Yesterday, President Biden outlined his plans for a roughly $2.3 trillion infrastructure stimulus plan. It’s a big, bold initiative that’s long overdue. Here’s a good story breaking down its components.The plan will now move to Congress where negotiations and changes will be debated over many months. One concern with the proposal is how it's paid for: higher taxes on corporations and wealthy individuals. I mention this because members of Congress may feel pressure to eliminate or reduce these specific proposed tax increases, which will ultimately impact how much infrastructure investment will be approved.A surprise in the President’s proposal is that it doesn’t call for any increase in the federal tax on gasoline, whose proceeds are used to fund transportation improvements. This hasn’t been raised since 1993, and it's one reason our roads and bridges have fallen to such disrepair today. This is as close to a user fee as one can get and thus may be more politically palatable than raising taxes elsewhere. And it would provide an incentive for motorists to consume less gasoline. It’s also in-line with two of the biggest proposals in Biden’s infrastructure plan: he calls for $621 billion to modernize transportation infrastructure, as well as $174 billion to boost the use of electric vehicles. I filled up my gas tank this weekend and recall it costing roughly $50. I paid attention to the overall cost, but didn’t do an immediate calculation as to how much of the $50 my gasoline consumption would send in tax revenue to Massachusetts (24 cents per gallon) or the federal treasury. I’m assuming I’m not a major outlier on this. That’s why I think sliding in a long-overdue tax increase in the federal tax may be a tool that Congress can use to overcome potential resistance to other funding sources and ensure our infrastructure receives the support it deserves.    

With the top exchanges for ESG securities, Europe’s markets have been the ones to watch for muni and corporate issuers in the U.S. It has long been a leader in this space because European market regulators incentivized investors to prioritize more ESG and sustainable securities over traditional or non-ESG type stocks & bonds. The resulting increased demand facilitated more issuance of securities that fit what investors were looking for to benefit from the incentives.According to this Wall Street Journal article, European regulators are now requiring more reporting from asset managers to measure and disclose the benefits of the projects being funded by ESG securities. The EU rules are mandatory for investors, who will need to publish a prescribed list of quantitative metrics, including carbon footprint, greenhouse-gas emissions, and hazardous waste emissions. This may be difficult if the issuers are not reporting on the necessary data, but the EU will propose rules in April to increase companies’ non-financial disclosure requirements.For issuers and investors in #muniland that focus on ESG, Green, or Sustainable Bonds, it will be important to monitor how these new investor and issuer disclosure requirements affect the market. President Biden’s statements around green and ESG have indicated that this type of disclosure might be on the horizon for U.S. capital markets as well.  

Climate risk is a growing focus of both investors and regulators, including in the municipal bond market. It’s a new layer of credit that can present institutional investors with a previously unknown amount of uncertainty. Today’s Wall Street Journal chronicles the steps one company, Hewlett Packard Enterprise (or HPE), took to proactively measure and disclose the risk climate change posed to its operations after the company suffered significant losses from Hurricane Harvey in 2017. It measured potential costs based on a global temperature rise of 1.5 degrees Celsius and a temperature increase of 2 degrees. The results? The larger temperature increase could result in extreme weather events costing the company more than $800 million, versus $200 million resulting from a smaller global temperature rise. HPE has since taken these estimates to build resiliency into its operations, and is disclosing those steps. Here’s the full story. In the muni bond market, these same risks are already being measured for investors by companies like risQ. risQ can provide investors with a measure of potential risk by CUSIP, which is remarkable detail. For issuers, being proactive like HPE likely offers an opportunity to signal to investors and regulators that you’re taking this real risk seriously, and that you're taking steps to measure and disclose the potential impacts. Multiple ESG elements can blend into these materials that more investors are asking for. Larger institutional investors have been vocal about their desire to see climate risk disclosed for some time now. Here’s an earlier story from the Wall Street Journal that covers how Ben Watkins, Director of the State of Florida’s Division of Bond Finance, went on a listening tour to hear for himself what types of data bond investors would be interested in.  

There’s a saying in the oil exploration industry - “Oil is where you find it, but first you have to find it” – that I think is apt for issuers as they consider their financing needs in 2021. Large pools of new capital were actively buying in the municipal market in 2020, namely, new taxable investors. To tap into this new demand this year, issuers need to understand where to look, what’s needed to tap it well, and the immense value they can extract from doing so.According to Bloomberg, state and local governments issued about $457 billion in 2020, largely driven by a sharp jump in the sale of taxable bonds. Of that amount, issuers sold $140 billion of taxable municipals, more than double the amount sold in 2019. That massive increase in taxable supply, coupled with ultra-low interest rates in other fixed-income markets, led to a swell of demand from both cross-over domestic taxable buyers as well as non-traditional, international investors. The outlook for 2021 from several Wall Street banks forecasts for even greater taxable supply in 2021.For issuers, this is a huge development: there is now new demand willing to invest in taxable paper used to advance refund higher-coupon tax-exempt bonds. John Loffredo of MacKay Shields, one of the biggest tax-exempt and taxable buyers in the muni market, didn’t mince words when he spoke at BondLink’s IR Leadership Conference in 2020. For large issuers, pivoting your bond program to focus on this demand is more than just an opportunity, it’s really more like a necessity. Three ideas came out of that interview with John: Issuers should start by reviewing their list of existing tax-exempt investors to inquire if they also maintain a taxable desk. Knowing your current holders is always key, and this is one of the simplest ways to discover new opportunities. A significant portion of international demand has mandates and incentives to invest in bonds designated as sustainable or to be used to create environmental benefits. If your bond sale is too small to be considered of benchmark size, a good way to still draw taxable demand is to go the extra step to create a sustainable offering. Taxable buyers are not set up to undertake muni issuer credit surveillance. Proactive issuers in #muniland should take steps to ensure they are set up like corporate issuers: prioritize stronger transparency with regular investor communications, more accessible data, and a dedicated investor relations website. This last point is critical for any large issuer hoping to tap new taxable demand as efficiently as possible. Tax-exempt issuers would do well to signal that future credit surveillance will be efficient for these new buyers. How? Set up a dedicated IR website that centralizes all of your financial and other credit information that a buyer will benefit from in addition to disclosure filings on the MSRB’s EMMA website.Here’s the link to the full interview if you’re interested in hearing Lofreddo’s perspective.

The University of Kentucky officially launched its new investor relations (IR) website, www.UKYBonds.com, today as part of its enhanced transparency and outreach efforts to inform and attract potential investors to the university’s bond program.

In the $4 trillion municipal bond market, all of the market’s activity stems from the individual finance officers and public sector CFO’s who ‘man the conn’ for the 60,000 governments/nonprofits that issue bonds. It’s a difficult job issuing bonds, especially given the large public sums at stake and the lack of resources available on the government side of the table.Despite the abundance of technology that’s available to other market participants, however, issuers who arguably need it more lack access to similar advancements. And that’s where BondLink fits in: our mission is to provide the software issuers need to leverage technology in order to reduce costs and increase efficiency in managing their bond programs.Today, we are excited to announce a major new expansion of those tools: we developed a new market data Dashboard that directly connects our issuer-clients to the critical bond market information necessary to gauge and understand market trends & conditions. This includes a new collaboration with ICE Data Services, which is part of Intercontinental Exchange. Its daily interest rate curve is transaction-driven using large-sized trades reported to the MSRB. By relying on actual trade data, it gives our issuer-clients a better, truer read of market levels. The ICE curve joins other data sets, including the Market Conditions Index (from an issuer’s perspective) from Municipal Market Analytics (MMA).This new tool adds to BondLink’s existing functionality, including investor intelligence & analytics, compliance solutions, and deal preparation. We’re proud that we can offer the bond market’s only all-in-one solution for issuers, whether they are in the market issuing bonds or not. We’re also excited to expand our partnership network with a data-driven leader within fixed-income in ICE Data Services. Along with MMA, we’re giving our issuer-clients advantages in many ways by working directly with leading participants like Ipreo by IHS Markit and Fidelity Investments. I encourage every issuer to have an open mind when exploring just how much our solutions and networks can help them. The issuer experience is complex, and we have a long way to go. But it’s the area of the bond market where technology can provide the biggest lift, and I’m excited to continue strengthening our platform to serve the industry that connects us all.You can read even more about our latest collaboration with ICE Data Services on The Bond Buyer.

BondLink and ICE Data Services announce a collaboration to bring bond market data to municipal issuers.

Now municipal bond issuers who use BondLink will have full access to ICE Data Services benchmarks, pricing information and other data to help them with pricing their new issues and monitor secondary trading activity.

Next week, the Massachusetts School Building Authority (MSBA) expects to issue approximately $1.4 billion in tax-exempt and taxable bonds, which will be one of the largest bond sales it has undertaken in years. The MSBA provides grants to cities and towns to fund the construction and repair of school facilities across the Commonwealth, and its success in administrating such a big program — funding multiple thousands of school projects — is a model to other states.The most notable aspect of next week’s sale, however, is not its size. The MSBA is designating the offerings as “Social Bonds”, and may be the first of its kind in the municipal bond market. This follows what the Commonwealth did in 2013, issuing MuniLand’s first Green Bonds (“Massachusetts Goes ‘Green’”, Wall Street Journal).  Like Green Bonds, Social Bonds aim to finance projects with an identified social objective. For the MSBA, it’s ensuring “inclusive and equitable quality education and promoting learning opportunities for all”, according to its preliminary official statement. It intends to follow the guidelines for Social Bonds developed by the International Capital Market Association (or ICMA), As we heard from Ashton Goodfield and James Dearborn of DWS on our latest Expert Series Webinar, investing using an ESG focus is growing in importance for both institutional and retail investors. More investors want to know where their investment dollars are going, and thus want to focus on supporting programs and projects they care more deeply about. Funding new schools provides clear social benefits.MSBA’s Social Bonds are an important “next step” by issuers to connect investors more closely to the projects being funded, and I suspect a successful financing next week could pave the way for a large number of other municipal issuers to also issue Social Bonds. I think it will see demand from a large array of new buyers, including from investors outside the U.S. In fact, as an indication of potential global demand, the MSBA’s prospectus includes notices to potential investors in the E.U., U.K., Hong Kong, Switzerland, the Republic of China (Taiwan), and Japan.For more information on the MSBA and its upcoming bond sale, please visit www.MSBABonds.com. 

It is vital to speak these three words: Black lives matter.We at BondLink are outraged at the murder of George Floyd by the police. We mourn his death, just as we do for the countless other Black lives that have been taken. These killings are not isolated. They are enabled by systemic racism and patterns of police brutality that threaten the lives of Black people throughout this country. We stand with the protestors who are demanding accountability and reform to end these injustices, and we denounce white supremacy in all its forms. We cannot be silent, as silence only enables the continuation of a system that perpetuates violence and racial injustice.At our core, BondLink’s mission is to help municipalities invest more directly into their communities, and we believe that supporting our communities means taking actions to uplift people of color. We recognize the urgency of fighting for black lives and ending police brutality, so we are making a donation to Black Lives Matter, as well as matching any employee donations to organizations that are fighting against racial injustice and police brutality. We know we must also challenge our ways of thinking and examine how we work together at BondLink so that we are actively engaged in the battle against systemic racism. The less-overt instances of racial injustice around us can often seem invisible, particularly to those among us who are not people of color, but it is our duty to look closer and do the hard work of confronting these issues and committing to be better.We at BondLink hope that this is a time for lasting change. We stand with those fighting for racial justice. Black lives matter.— Colin MacNaught, CEO & Co-Founder, and Carl Query, CTO & Co-Founder

The National Investor Relations Institute (NIRI), the largest professional investor relations association in the world, recently hosted a webinar on “Maintaining an Effective IR Program through the COVID-19 Pandemic". While its focus was from a perspective of corporate IR practitioners at some of the largest companies in the world like Ford Motor Company, there are many useful direct parallels for muni issuers navigating through this environment. Whether or not you have a bond sale on the horizon, these are some important takeaways.Identify your pressure points. Investors may need some hand holding as they review your credit and get their arms around the impacts of this crisis on your bonds. In the near term, as we struggle through an unprecedented drop in economic activity, cash flow and liquidity will be their focus. Be proactive and responsive to these concerns with frequent updates on both the revenue- and expense-side impacts to your operations.Be the calming force. We are in uncharted waters and it is critically important to stay in touch with investors. This is a time to show your organization’s good governance and leadership. While cash flow and liquidity may be the immediate concern for investors, you also need to show investors the bridge to the future through both the actions you are taking and the actions you can take to weather the storm. Showing a path forward and highlighting your longer term strategy should be a part of the messaging from your organization as you progress through this crisis.Bulk up your IR website. Now more than ever, electronic delivery of information is essential to ensure timely communication. As decisions are being made and new information becomes known within your organization be sure to clearly communicate it and make sure information is easy to find on your website. Virtual roadshows, conference calls and leveraging social media are useful tools for communicating relevant information to both existing and prospective investors.A lot will continue to change throughout this crisis. One thing that can remain constant is your commitment to keeping investors engaged so your municipality can overcome these obstacles and maintain stable financial operations moving forward. Municipal market issuers, will no doubt, rise to the challenges facing them.

The Kentucky State Property and Buildings Commission will price the $35.4 million taxable lease revenue bond deal Tuesday.

On Monday, SEC Chairman Jay Clayton and Office of Municipal Securities Director Rebecca Olsen took the unusual step of releasing a Public Statement to ‘request’ that municipal issuers share as much current financial information with bond investors as possible. The statement’s timing is critical: while COVID-19 will undoubtedly lead to significant credit deterioration for most issuers across the country, existing disclosure requirements would likely lead to a big lag in reporting on the extent of the impact. That’s not good for investors, nor the market in general, and the SEC rightly moved fast to offer issuers a solution.Knowing how badly disclosure around COVID impacts could lag, the SEC’s Statement included important guidance on how to report on current data and examples of data that may be helpful to the market. It also encouraged issuers to share future projections and the assumptions underpinning those projections. While it made clear it cannot provide safe harbors, it did give issuers comfort in saying that good faith attempts in sharing interim data would not likely be second-guessed.This is extraordinary. Not only the quick reaction of the SEC and the parallel guidance given to corporate CFOs as well as to public sector CFOs, but it’s providing actionable guidance to issuers on how to move the market forward in terms of real-time transparency. I think the vast majority of issuers are open to the idea of sharing more data with investors – since they are already collecting it and reporting on it to taxpayers. But guidance like this has been lacking, which has held the market back. Let’s hope this Statement – triggered by COVID – leads to a change of behavior and a big boost in data transparency.

The SEC encouraged issuers to provide investors with forward-looking information as to how the pandemic will affect future finances.

“The pandemic puts all cities in a vulnerable position,” said Howard Cure, director of municipal bond research for Evercore Wealth Management.

The city moved up its bond notice and document postings in response to a BondLink report saying investors want more time to review deals.

The site will provide a single location for investors to access its financial and operating data.

Most issuers in the municipal bond market don’t have the luxury to postpone an expected bond sale indefinitely just because market conditions turn negative. For smaller issuers who issue bonds once per year, sales require a significant amount of time in planning and documentation. Other issuers may be borrowing to reimburse themselves for initial funding of a public infrastructure project.Knowing that you have to come to market during a period of reduced liquidity, reduced investor demand, and yields trending higher, here are some steps that you can take to make to give your sale the best chance to succeed:Communicate. Being transparent & accessible during periods of market stress is an important best practice. Working with counsel and advisors, issuers should develop a comprehensive plan to communicate with the market.Uncertainty around the credit impact of coronavirus is top-of-mind for most investors. Issuers should use conference calls and roadshows to share how you’re measuring the economic impact of current events, how you’re addressing the financial effects, and when you expect to deliver more updates in the future.Leverage Up-to-Date Data. We’re now in a period of remote work, which could extend for weeks or months. Like issuers, investors will be remote and laser focused on credit given the uncertainty over coronavirus. Make sure you provide as much recent public data and information  as possible on your IR website or through voluntary filings to the MSRB’s EMMA website. This commitment to speed and thoroughness can help you earn the investor confidence that issuers are seeking in an uncertain time.Plan Ahead. If you expect to be in the market soon, let investors know about your bond sale earlier than usual. With cash leaving the market after 60 consecutive weeks of inflows, investors are going to be much more selective. Don’t cut corners – get your POS released early, do a virtual investor roadshow or investor conference call, and be accessible to take questions or suggestions on preferred bond structures.MuniLand abruptly pivoted to a buyer’s market from an issuer’s market in the past two weeks. Issuers can still access the market successfully. But to do so, they should take steps to reduce the uncertainty that’s currently driving investor decisions.

When pressure on the muni bond market’s secondary market eases and the primary market re-opens for new-issue bonds, issuers in every sector will be facing a stark new reality: significantly higher interest rates, wider credit spreads, and credit reviews by rating agencies looming on the horizon.Transparency, access to information, and the ability to communicate with key officials and staff are all paramount to manage a bond program as efficiently as possible in this new environment. With that in mind, issuers should take advantage of these three tools:Dedicated Investor Websites: With all market professionals working remotely for the foreseeable future, consistently providing up-to-date interim financial information like monthly revenue collections or budget updates via an investor website is really critical. It will reduce uncertainty for investors in both the primary and secondary markets, and provide much-needed confidence that a steady stream of current data will be easily accessible in the future. These websites should be free and open to institutional investors as well as non-traditional and retail buyers. Disclosing your information once in a single location will also decrease administrative stress on your team, allowing you to focus on more strategic initiatives throughout the issuing process.Investor Calls & Virtual Roadshows: The more progressive issuers in the muni market will follow best practices undertaken by corporate leaders over the last few weeks by speaking to investors as soon as data on the coronavirus’ credit impact starts to become available. This can include live conference calls or recorded, virtual roadshows – both are valued channels of communication for bond investors. An issuer can conduct calls on a regular basis – say, monthly or quarterly with key staff – which is another way of reducing the uncertainty gaps for the market. I also think that, in this environment, it would be very beneficial to include top officials like governors, treasurers, and mayors in these communications. Adding the support of these major officials has the power to reassure investors and signal they’re a top priority.Streamlined Distribution Tools: Updates to the MSRB’s EMMA website are critical, and under certain circumstances, legally required. All issuers should work with their counsel to identify required updates to be made to EMMA while also looking for opportunities to make voluntary filings to EMMA as often as possible. To do this seamlessly, use technology that allows simultaneous posting of documents to an investor website as well as the compliance repository.The lowest cost of capital is always going to flow to those issuers who provide current data to investors. In a challenging credit environment, this is going to be even more true. Using the tools and channels outlined above to share data will help ameliorate the pain of higher rates and wider spreads.

For more than a year now, issuers in the muni bond market have experienced a steady decline in interest rates and weekly reports of cash pouring into the market. Rates seemed to go lower every day, and changes to the federal tax code set expectations that investor demand would be steady for the foreseeable future. When 10-year rates sunk below 1% less than two weeks ago, market professionals were describing conditions as “free money” for issuers.The period of issuer bliss has quickly been interrupted. Last week, Lipper reported the first outflow of investor cash from the muni market in over a year, breaking a string of 60 consecutive weeks of inflows. Trouble in the corporate bond market spilled into munis. While credit spreads had already begun to widen, yields on tax-exempt bonds have sharply corrected to higher levels this week. The financial press has reported that some pricings have been postponed and others downsized.The driver, of course, is the coronavirus, with investors in all markets concerned about their investments in businesses and economies. The Wall Street Journal wrote a story on the potential impact for certain muni issuers. I’m not a lawyer and I’m not offering legal advice in this blog. But when the market’s liquidity has been interrupted, as seems to have occurred this week, my instinct as a former issuer would be to communicate proactively with my investors. It’s good customer service, and good investor relations. Here are some thoughts:All issuers should consult with bond counsel on the legal requirements around disclosure driven by the effects of the coronavirus. These requirements will be different depending on whether you are in an underwriting period of issuing bonds or not;If you’re not in the market, even if there are no 15c2-12 requirements to disclose right now, it’s good investor relations in our opinion to communicate with investors. Let them know how you may be impacted, what you’re doing, what you’re measuring, and give them confidence that they will hear from you as this period of uncertainty extends;All businesses in the U.S. have quickly become remote because of the coronavirus, making electronic channels of communication central to efficient operations. Investor conference calls or roadshows are good channels to use to update the market, especially as in-person investor meetings and conferences are canceled;This period will place an emphasis on issuer-to-investor connectivity. If investors continue to migrate to corporate bonds and dividend yielding stocks over munis, outflows will continue to be negative, which will force investors to be much more selective of the bonds they are willing to buy. Easy access to issuer data in this environment will become more valuable to investors, so issuers should look for opportunities to share more timely information on their investor websites or on EMMA; andThis period of remote communication may become the new normal, especially if the coronavirus’s impact on the bond market continues for some length of time. Issuers who are quick to adapt to using electronic channels like websites for sharing data, as well as conference calls and roadshows, will be preferred by investors.Our view at BondLink is that over the long-term, capital will flow more efficiently to issuers who are transparent, communicate with investors, and make their data easier to access using electronic channels. This becomes much more important in the short-term whenever the market becomes illiquid and investors are under stress as they try to assess the impact of the coronavirus on their muni investments. What would I do as an issuer? I would look for ways to minimize that stress and reduce the uncertainty: more transparency and more communication.

Wisconsin heads into the market next week with a $322 million refunding that it is promoting on the state's new investor relations website.

The Iowa Finance Authority is aiming to broaden its investor appeal with a new financial information portal that debuted ahead of a $97 million single-family housing transaction and $250 million state revolving fund deal.

More #MuniLand issuers than ever are communicating directly with buyers through investor relations (IR) websites and attracting stronger demand as a result. We believe this is a great step forward, and we’re confident it’s improving transparency and efficiency in our market.As more investors continue to consume information through these digital channels though, it’s important to recognize that issuers are no longer only competing with other securities. They’re now battling for investor attention that’s dominated by news sites, social media channels, and countless other distractions on the internet. That’s why we’ve put special attention toward finding ways to engage with investors when they’re signaling an incredible amount of purchase intent on muni-specific websites. We’ll admit, it hasn’t been easy, but the results are very promising.Back in April, we proudly announced our research collaboration with Fidelity Investments. Fidelity is an incredible investment management company whose platform allows individual investors to place orders for municipal bonds in either the primary market or the secondary. Our collaboration gives retail investors using Fidelity direct access to data and financial information for the issuers who use a BondLink platform. Here is a link to the blog about this, and a story from The Bond Buyer. BondLink's Fidelity Integration in action Last month, we announced another data collaboration with Ipreo by IHS Markit. Like Fidelity, Ipreo is an incredible company that provides the order management system for institutional investors to place orders for new-issue bonds being sold in the municipal bond market. Working together, Ipreo and BondLink now provide these investors with one-click access to issuer financial data when they are accessing the Ipreo platform to place an order for bonds.  BondLink's New IPREO Integration The integration has only been active for a month but the feedback from investors is all very positive. Using our technology, we’re efficiently providing more information to investors at the very point of purchase so they can better understand the credits and the issuers they are considering investing in. Taken together, the collaborations we’ve created with Fidelity and Ipreo demonstrate how we’re leveraging technology to help our issuers stand out in a very crowded and fragmented bond market - with both institutional investors and individuals. Here’s a link to the story from The Bond Buyer.We have even more collaborations in the works, so stay tuned for additional updates on those!

There’s lots to unpack over the next few weeks, so here it goes…Back in mid-September, we hosted our annual IR Leadership Conference in Boston, the only event in #MuniLand focused exclusively on best practices around investor outreach. This is our opportunity each year to facilitate the direct engagement between issuers and bond investors, and to spur dialogue on timely issues that are impacting the bond market. For our 2018 event, we focused on core IR best practices, including some legal and regulatory panels as well as practical advice from corporate IR professionals. The speakers reflected that focus, and included Rebecca Olson from the Securities and Exchange Commission, Nixon Peabody bond attorney Dan Deaton, and Vertex Pharmaceuticals’ VP for IR Michael Partridge. For 2019, we moved the IR conversation a little more downstream. For example, Tom Vales of TMCBonds/ICE and Richard Carter of Fidelity Investments spoke about the growing importance of electronic trading in the municipal bond market. We dug into the criteria development process for factors like issuer transparency with the heads of public finance at S&P, Moody’s and Kroll Ratings. The event was capped with an issuer-investor roundtable discussion on the growing importance of ESG, with the dialogue led by Breckinridge’s Adam Stern, Fundamental Advisors’ Hector Negroni, and MarketAxess’ Steve Winterstein.  Tom Paolicelli discusses Investor Relations best practices for issuers We packed a lot into a single day but the open dialogue and practical feedback from investors was excellent. Our issuers left the event armed with actionable tips to help their bond programs stand out to investors. Here a few notable takeaways from the 2019 summit:Electronic trading in fixed income generally is rapidly approaching the levels seen in equities, and #MuniLand is no exception. Over the course of 2017 & 2018, of the $1 trillion in par of municipal securities traded in inter-dealer trades, 29% were executed on an ATS. A lot of these trades are happening in the secondary market, but the primary market is also relevant with retail platforms like Fidelity.com and Schwab.com. There are clear steps issuers can take to ensure their bond sale is set-up better to do well when it comes to electronic trading. We’ll have some follow-up to this in the coming weeks; andESG has quickly become a big deal with investors.This is the logical evolution of the “Green Bond” movement, and it continues to gain importance with buyers. Our investor panel on this topic highlighted the importance of issuers capturing ESG in their disclosure, and using technology to provide photos, project updates, and environmental impacts of key projects.We also used the 2019 conference to announce a number of exciting developments, including new product features and partnerships. We’ll focus on those in more follow-up posts to the Fisc, so stay tuned in the coming weeks!

The website aims to provide information about the restructured bonds and to advertise them as creditworthy.

“The new platform, is a corporate-style investor relations site featuring substantial data and documentation detailing the credit fundamentals behind the COFINA Bonds and the Corporation’s strong credit profile,” added COFINA board member Mr. Daniel Heimowitz.

A larger-than-ever share of municipal bonds is being managed by professionals, shaking up a market that has traditionally been the domain of mom- and-pop investors.

A new partnership between two financial-service companies has proposed to make the municipal bond market more transparent for investors.

We are thrilled to introduce you to BostInno's 2019 50 on Fire.

A new partnership between two financial-service companies has proposed to make the municipal bond market more transparent for investors.

A conduit municipal bond issuer for the state, the IFA sold $450 million of green bonds (NR/AAA/AAA) last April, during a volatile time in the muni bond marketplace.

BondLink and Ipreo by IHS Markit today announced a collaboration between the two companies that will provide issuer credit data to institutional bond investors via technology from Ipreo in another development in the trend of technology taking a more prominent role in the municipal market.

California's bond sale plans were buoyed Friday when Fitch Ratings upgraded the state's general obligation bonds to AA from AA-minus.

It’s a new corporate-style investor-relations site at www.stateofmainebonds.com that provides a single location for investors to access information about the state’s credit fundamentals.

The Hugh L. Carey Battery Park City Authority has launched a dedicated investor relations website to provide a single location for investors to access BPCA credit fundamentals.

Dave Massaron, Detroit's chief financial officer, says PRAG will work with the city to build more robust investor relations and on the city's outreach to rating agencies and its strategy as it looks to build out its debt model.

The issuer launched a new investor relations website in advance of its upcoming bond sale.

You may have seen last week’s article about our new integration with Fidelity Investments®. It was also a featured story in The Bond Buyer and other publications. We’ve been working on this for some time with Fidelity and we’re very excited to bring it to market. Together, BondLink and Fidelity are seeking to stregthen muni bond research for retail investors.As you know, BondLink’s mission is to help issuers engage more investors in the $4 trillion municipal bond market. The formula is to combine enhanced transparency packaged with cutting-edge technology. We recognize the buy-side in MuniLand is not monolithic: it includes various types and sizes of institutional investors, as well as non-traditional investors like retail investors. It’s a lot easier for BondLink to help our issuer-clients engage more with institutional investors, though. We know who they are, what they hold as investments, and have established paths to communicate with them. Retail is much more difficult. That’s why our integration with Fidelity is so important for issuers, and frankly, for the broader municipal bond market’s evolution. Despite being such a large investor in the muni bond market, individual investors typically don’t have easy access to issuer information, and don’t have sophisticated tools/analytics and dedicated research teams that institutions do to help evaluate investment decisions. And researching a governmental issuer can be extremely challenging without these resources, especially if it needs to be done quickly and efficiently.Our goal with the integration is to help empower this very important class of individual investors in the primary market. Now, Fidelity Investments®’ millions of retail investors can access BondLink’s aggregation of issuer data on Fidelity.com. Easier access to issuer information will allow for more research by retail investors, including the ability to select bonds based on the types of infrastructure projects being funded or the issuer’s overall level of transparency. Every single one of our issuer-clients wants to find new paths to reach retail. They also know to reach more retail investors today, you must meet them where they are: online. Retail investors use their mobile phones, tablets and computers. Now with BondLink and Fidelity, issuers have an easy way to activate the power of the internet to enhance their bond sales.Fidelity has long been a pioneering leader in enabling retail investors through technology and research. As one of the first firms to enable individuals to buy bonds online, we couldn’t be more excited to work with Fidelity to launch this first-of-its-kind capability. And with BondLink’s issuers’ commitment to transparency, this new agreement will help unlock more demand for their bonds from individual retail investors.We’re excited to open up this new tool for issuers to reach more retail investors, and to be delivering it with an industry thought and technology leader like Fidelity Investments®. As one of our BondLink clients, Michael Gaughan of the Vermont Municipal Bond Bank said in a recent article, “Giving more individual investors better access to information is always a good thing for this market.”

We're excited and proud to partner with Fidelity because it's a leader in empowering retail investors through technology and research.

We're excited and proud to partner with Fidelity because it's a leader in empowering retail investors through technology and research.

We're excited and proud to partner with Fidelity because it's a leader in empowering retail investors through technology and research.

The consolidated city-county government priced the deal Thursday after a retail order period Wednesday. It consists of $610 million of bonds for the long-anticipated justice center project, plus roughly $13 million of bonds to finance an assessment and intervention center.

The bonds issued for LCRA’s Transmission Services Corp. will retire about $300 million of commercial paper and private notes, and refund about $115 million of 2009 bonds, officials said. The new bonds will mature serially from 2020 to 2049.

Two common traits of the municipal bond market are its size and fragmentation. It also maintains a high volume of muni bond selling in the new-issue market, often called the primary market. The last five years of market data show that every week, on average, there are more than 200 new bond sales representing more than $7 billion in par amount of bonds – more than $1 billion a day.Keeping up with this volume is increasingly difficult for analysts, who usually cover dozens of credits. This is why, for years, bond investors have recommended to issuers that they provide longer notice for an upcoming bond sale.Generally, issuers provide notice of a bond sale with the publication of the preliminary official statement (POS), often about a week before the financing. For the first time, BondLink has measured the level of investor interest generated with a typical 7-day notice of an upcoming bond sale and quantified the benefit of providing earlier notice to the bond market.This analysis is the first of its kind, and we will be releasing these new insights later this week. We’re excited to share the results with our community as the benefits to issuers, in the form of greater investor interest and engagement, are significant.We’ll also continue to share more insights this year about the impact of stronger investor relations in the municipal industry.

“The Dead Zone” is an excellent book written by Stephen King that was adapted into a movie in the early 1980’s. During my time on the issuer side, the title of this book (and movie) occurred to me often when I was about to launch a public bond sale. I’m convinced that I was not alone in thinking of this phrase as a future bond sale goes on the radar screen. I think most issuers in the bond market are explicitly or implicitly aware of the anxious period of time when you know you are about to issue bonds, but no one in the bond market – or at least no one on the buy-side – is aware of the upcoming sale. The POS or NOS is not yet public and bond ratings are not back from the rating agencies’ meaning the underwriter you’ve chosen can’t release a wire announcing the sale. So, what happens? Generally speaking, nothing happens. Nothing. In their own minds, the issuer is on the clock. They start really focusing on market conditions. But no matter the level of preparation, the issuer knows they are taking market risk everyday: the risk is that new-issue supply will build and interest rates will significantly move higher as the financing date approaches. In talking with other issuers around the country, it’s standard practice for bond sales to be approved internally two or three months (or more) in advance of the actual sale. The public announcement of the sale typically occurs with the release of the POS, however, which in most situations occurs only about a week prior to the sale. Issuers always have flexibility to move dates around for a future financing, but in reality they are actually pretty limited. Too many steps have to occur in sequence on the issuer side – like lining up a bond counsel, preparing a POS, updating disclosure, etc. – that makes it difficult to indiscriminately move a sale date around on the calendar. Generally, when a decision to issue bonds has been made, issuers target a certain week on the calendar when they are expecting to price. The sale might slide sooner or later by a week, but typically not by more. Another consideration that also could bind issuers: often-times bonds are issued to reimburse the government for capital spending that has already occurred. This means that bond proceeds are really needed. For all of these reasons, issuers can be locked in to their sale dates months in advance of the sale.You are locked in as the issuer, taking market risk every day, yet it’s too early for the underwriting team to market the bonds. This period is the Issuer Dead Zone. Based on feedback from bond investors, however, it’s also a missed opportunity to stand out as an issuer. Consider the average weekly volume of bonds sold (by par) in the primary and number of transactions over the last five years: over $7.5 billion in 226 different transactions per week. It’s a firehose of bond sale activity. The solution is to market your own bond sale.Issuers can avoid the so-called Dead Zone by announcing their own bond sale via press release and on their investor website as soon as the bond sale is authorized. Even if the exact dates or even the exact week of the sale has not yet been identified, issuers can signal to the market that they expect to issue bonds in a future month or in a future fiscal quarter (with a caveat like ‘subject to change’). By announcing the sale publicly and well in advance, an issuer raises awareness of the sale for both traditional and non-traditional investors including local buyers. Non-traditional investors who are not plugged into the muni bond market calendar need to be aware of the sale and they need more time to prepare in order to make a decision to place an order for bonds. For traditional investors, early announcement of the bond sale gives the credit analyst covering the issuer more time to dig into the details in order to complete a full evaluation. The more details he or she has as an analyst, the more comfortable they are in the credit (whether the story is good or bad). Comfort leads to larger and better orders in the primary market, and enhanced liquidity for similar bonds that may be available in the secondary market. For the portfolio manager, the early awareness of the bond sale allows them to prepare their portfolio – like freeing up cash – for the new-issue bonds. For issuers, the best practice is this: don’t hide the ball. In fact, do the opposite and let the market know well in advance of the sale. Announcing the upcoming sale a week in advance with the release of a POS is not optimal for your investors. It’s your bond sale and you are responsible for the outcome: so avoid the Dead Zone and market the bonds yourself.By the way, this is also point #6 on the list of 10 Muni IR Fundamentals – Communicate Your Bond sale. We’ll have more to say on this topic soon.BondLink_When_To_Announce_Your_Bond_SaleDownload

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 bondholdersIdentify new institutional investors and a plan to reach themFind new ways to access non-traditional investors, such as local and retail investorsOverall, 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!

BondLink, the sole provider of investor relations software solutions in the $4 trillion municipal bond market, was recognized in Government Technology’s GovTech 100 list for 2019.

BondLink is teaming up with Municipal Market Analytics to deliver bond market research to BondLink issuer clients.

The first week of December was significant in MuniLand. In this week’s blog, I’ll cover the City of Detroit’s re-entry into the muni market. Next week, I’ll share my perspective as one of the panelists at the SEC’s conference, “The Road Ahead: Municipal Securities Disclosure In An Evolving Market.” First, about Detroit.A decade after bankruptcy, the City of Detroit has returned to the bond market. The City issued two different bonds last week, one through the Michigan Finance Authority to restructure some of its outstanding debt for budget relief purposes; the other was a new-money bond secured solely by the City of Detroit’s own credit strength. This was the first time Detroit utilized its own credit structure in almost twenty years.Since the bankruptcy, Detroit underwent a near-complete overhaul. The City has new leadership and started to balance its budget. This enabled its exit from state oversight and generated surpluses for the first time. These efforts were recognized with rating upgrades by both Moody’s and Standard & Poor’s. Detroit’s credit trend is definitely upward.A key part of their overhaul was also deliberate and direct engagement of the buy-side, as other top municipal issuers undertake. Detroit’s finance team saw the need to go beyond buttressing the City’s credit, and to also rebuild the City’s investor relations. In general, investor relations is still something most issuers don’t invest enough time and effort into prior to a bond sale. For Detroit, their investor outreach efforts were rewarded.Working with BondLink, the City launched a new dedicated investor relations website www.CityofDetroitBonds.com in August 2017 – well before it planned to issue new bonds. They worked with their peers in the Michigan State Treasurer’s Office to host an investor conference held at the Detroit airport several months before the sale. And, leading up to last week’s bond sales, they worked with their advisor team at Hilltop and underwriting team at Goldman Sachs to complete a series of investor meetings and roadshows.So how did Detroit do? The City sold bonds at or below 5%, plus strong demand that allowed the City to upsize its transactions. In short, their results were incredible given where they were coming from as an issuer. Congratulations to Detroit and their entire team. The City’s sales last week were prime examples of the bond market signaling to an issuer it is on the right path.

In August of 2017, I wrote an op-ed in The Bond Buyer entitled “Issuers: Don’t Let the Rating Agencies Tell Your Story – Tell It Yourself”. This week’s Fisc commentary is a follow-on to that initial article, driven by an excellent story last week from Bloomberg reporter Amanda Albright.Albright’s story highlights the risk to issuers who don’t engage investors directly but instead rely on the rating agencies to do so through their assessments. I encourage you to read her article.Ratings are meant to translate all of an issuer’s characteristics at a single point in time into an assessment of relative risk based on their criteria. These can be very valuable for investors requiring a third-party assessment. When the criteria changes, however, as Albright’s article centers on, it can have major implications for issuers. To wit, S&P just changed their evaluation model for priority lien debt, affecting the ratings of nearly $50 billion in outstanding bonds. Of the 1,300 issues S&P includes in this category, 85% are expected to receive a new rating, with 45% likely to rise or fall at least two notches. Obviously, it is important to have the most accurate rating outstanding, and S&P should be applauded that it is responding to court rulings involving Puerto Rico debt. But multiple notch swings can, in fact, be disruptive to issuers and investors. Nothing fundamentally changed with the issuers themselves, simply the criteria of the third-party providing its assessment.The key takeaway for issuers is to put as much focus on your investor engagement as your rating agency efforts prior to a bond sale. Ratings are important, but at the end of the day they are only a single data point for investors to use when making an investment decision. More and more investors will do their own credit assessment, but they need easy access to issuer data in order to do that.

I hope everyone had a very Happy Thanksgiving. For this week’s blog, here is a collection of thoughts on timely subjects:2018 is coming to a close. There are only about three weeks left this year with a potentially meaningful supply of bonds. According to The Bond Buyer data, through the end of October, supply of bonds (by par) was down year-over-year by nearly $45 billion in 2018.All of the forecasts we’ve seen for issuance in 2019 project between $350 billion and $375 billion to be issued. So more than 2018 but not as strong as 2017.Conferences are winding down. This week, BondLink will be attending/participating in two conferences. The first is the Association of California Water Agencies Fall Conference & Exhibition in San Diego. Come see us at booth 706 if you’re there. We’ll also be attending the Massachusetts Investor Annual Investor Conference in Boston this Wednesday.Also coming soon is the annual awards dinner hosted by The Bond Buyer. BondLink is proud to be associated with a number of honorees, including Wayne County, MI which was awarded the Midwest Regional Deal of the Year Award. This year’s Trailblazing Women in Public Finance includes Deborah Goldberg, Massachusetts State Treasurer and Chair of the Massachusetts School Building Authority; and Sarah Riordan, Executive Director and General Counsel of the Indianapolis Local Public Improvement Bond Bank.Issuers continue to make news. The Bond Buyer’s Kyle Glazier had a great piece on Washington, D.C.’s new capital asset management system, which gives the District’s financial team and its Council the ability to drill down into its inventory of public infrastructure to determine its useful life and repair/replacement schedule. You can read our take on this from last week here.Part of Washington, D.C.’s updated capital plan includes $2.3 billion for The Washington Metropolitan Area Transit Authority (or WMATA). WMATA itself is coming to the bond market this week, with plans to issue $245 million gross revenue transit bonds in a negotiation transaction led by Citigroup. For more info on the bond sale, visit www.WMATABonds.com.Sticking with must-read articles, the Wall Street Journal wrote an insightful story on the rising costs of infrastructure investments for state and local governments due to higher material and labor costs. The article specifically points to the higher costs of steel, which is a critical building material for large public projects like bridge repair. The cost of borrowing for public infrastructure is also a factor, though not cited in the article. While long-term interest rates have backed down in the last week due to the sell-off in the stock market, they remain a significant source of volatility for finance directors planning their capital spending in 2018 and 2019.You can also help us pick our “story of the year.” I’m collecting submissions for the top 2018 story in #muniland. Please send me your suggestion for the issue or topic that dominated our market in 2018. I look forward to hearing from you.

You’ve heard both me and our industry articulate the value of muni issuers taking their complete credit story directly to investors. In a nearly $4 trillion market with hundreds of weekly sales, it’s continuously critical for muni issuers to separate themselves from the crowd in order to gain investors’ attention and earn the best possible price on their bond sales.Investors, after all, buy bonds. They can choose, or choose not, to invest in an ample inventory of sales every week, all year. Their selection criteria are usually a mix of their own priorities and credit requirements, market conditions, and the issuer’s level of transparency. It is especially with investor transparency that issuers can distinguish themselves.An issuer who understands and takes advantage of this is Washington, D.C. A few weeks ago, D.C. published its 2018 Long-Range Capital Financial Plan Report. While D.C. is a BondLink client, I’m not sharing this with you to advertise for the District. D.C.’s report is its own organic initiative, and I wanted to highlight the report’s industry significance, benefits generated, and some related best practices that other issuers can easily adopt.The report itself provides an ongoing and comprehensive status report for all projects. Both policy makers and investors need this information to assess risk and make decisions. We certainly see this in infrastructure projects, which is a critical government responsibility and major focus for both civil servants and investors.Project funding requests don’t exist on their own; they are part of a larger financial picture that must be evaluated on the whole. D.C. knows this. It has also paired its annual report with a proprietary Capital Asset Replacement Scheduling System (CARSS), providing a one-stop view of all projects and the District’s overall capital asset health.Delivering these reports (and the processes required to create them) is a strategic commitment. It’s not an incremental resource everyone will produce, and that’s always an opportunity.While D.C. has created what’s best for the District and its taxpayers, the insights other issuers can draw from this lie in answering one question: “In what new ways or areas can I be creatively transparent?” This often brings its own rewards, here are some of D.C.’s positive results:100% of all District assets inventoried and viewable (started at 14% when the report was first published in 2016)$2.3 billion in approved funding for Washington Metropolitan Area Transit Authority (WMATA) over 10 years$5.7 billion of unfunded capital needs identified and reduced to a new total of $3.3 billion through integrated planningAll capital needs identified and funded through FY 2028 (this includes deferred maintenance, increased pay-as-you-go cash, plus additional borrowing capacity to refinance existing debt and remain on-hand for further economy growth support)An upgrade in the District’s bond rating by all three agencies, including Aaa by Moody’sPublic corporations spend a lot of effort and money on their annual reports to investors. This is partly to comply with financial regulation and mostly because they know it helps them gain an edge with investors when it’s executed well.D.C.’s report is a good example for how all issuers can take the effort and money they spend on disclosure and rating agency meetings, repackage and innovate with it, and bring something new and useful to their community, government, citizens and investors. From the benefits achieved, I expect this will be a continuing trend and our muni industry will be better for it.

The big story in capital markets in October was volatility. It was a pretty choppy month – here are a just a sample of headlines that I noticed:“Dow tumbles more than 200 points in wild session”“Dow rallies more than 400 points in bounce”“Yields dip as stocks dive”“30-year Treasury Yield Hits more than 4-year High”Those headlines introduced stories detailing significant moves for both the Dow Industrial and U.S. Treasuries, which are both used as benchmarks for equities and fixed income markets respectively.The municipal bond market was not immune to this volatility. As we’ve mentioned before in prior blogs, issuers should be cautious about market conditions given the sell-off in long-term yields, the steepening of the yield curve, and investor net outflows. As supply ramps up for the annual end-of-year push, overall demand will be tested given the loss of key buyers on the long end because of changes to the tax code.Over the course of my career, I’ve had to sell bonds amidst choppy market conditions many times. Trust me, it can be an unsettling experience. If waiting out the volatility is not an option for you as an issuer, it’s time to be laser focused on the fundamentals. Here are a few lessons I relied on to get through a difficult market.Determine your flexibility. Recently, we’ve seen large offerings get downsized on pricing day or even pulled from the calendar. This is obviously a signal that market conditions are bad. But it’s also a signal of savy issuers who understand the flexibility of both their financing plans and their sale. It’s vital to work hand-in-hand with your financial advisor and banking team to determine your ideal size and structure that can be well-digested in the market while still meeting your capital needs. For example, perhaps the structure of the bonds can be adjusted so that you only offer on the short and long ends and reduce bonds in the belly of the curve until another time. If the appetite is there and it works with your debt-service profile, great!Gather your intelligence. This is where having a superior IR program makes your job as an issuer a lot easier. You need to reach out to your underwriters – and investors if possible – to see if anyone can alert you to red flags. Bankers, traders and analysts can have their fingers on the pulse of the buy-side and can let you know sectors/regions/ratings/coupons that are seeing little (or strong) demand. This type of market intelligence can be hugely beneficial, especially if you have some flexibility. Perhaps no one’s interested in 4% coupons right now, but you have the flexibility to set a 5-1/4%. Maybe that pulls in the additional buyers you need. And talk to other issuers as well. This is a community, and your fellow issuers can be a great resource. Get firsthand details on issue pricing from peers who just dealt with it.Develop your game plan. As they say, plan your work and then your plan. Did your intel suggest re-structuring your deal? Based on the results of points #1 and #2, determine if you have the flexibility to make adjustments. Figure out what you need to sell; find out what you can sell; and then take it to market. There are great deals to be made even in the most difficult of markets. And remember, sometimes waiting is just not the answer, especially in a rising-rate environment.We’ve seen some huge uncertainly in the markets recently. Having to borrow in this kind of environment just further underscores the importance of being proactive as an issuer. Talk to investors, and work with your advisor and banker to access the necessary capital in the most efficient manner.

Indianapolis Public Transportation Corporation, marketed to riders as IndyGo, will bring $26 million of local income tax revenue bonds Nov.

The Bond Buyer last week ran a very interesting series of stories reflecting on the events and market changes that have occurred over the past ten years since the global financial crisis. Each story in the series reflected on a different issue or topic, and I highly recommend market participants find the time to read them.One, in particular, is critical for issuers to digest: Robert Slavin’s article of the changing role of the rating agencies. This is a must-read in #muniland and you can click here for the article.Slavin notes that most bonds issued in the municipal bond market continue to be rated, with S&P and Moody’s assigning about 92% of them. That’s not a big surprise, as I think ratings – like online product reviews – are never going away. A third-party opinion of a security is still a valuable part of any investor’s evaluation process. Fitch and Kroll also continue to provide ratings to a larger and larger share of the market.The key take-away, however, is the role ratings now play in the evaluation process. Again, quoting from the article:“The rating agencies are better than they were before the financial crisis,” said Marylin Cohen, president of Envision Capital Management. “But we use the ratings as suggestions and not the Holy Grail.”Suggestions and not the Holy Grail. This is the same perspective we hear every day in our discussions with institutional investors of all sizes.At the Association of Public Treasurer’s conference held in Memphis in July 2018, I was joined on a panel by Vanguard’s Akiko Mitsui. We discussed what investors need and prefer from issuers prior to a bond sale. She stressed that more investors than ever before undertake their own credit analysis of bonds. As such, issuers would benefit if they shared more current information with investors sooner in the pre-bond sale process.From experience, I know that most issuers leading up  to a bond sale spend nearly all of their time and effort focused on the rating agencies. They spend little to no attention focused on bond investors, even though investors – and not rating agencies – are the ones who will actually purchase bonds and lend them the necessary capital to finance their infrastructure. That is a big miscalculation, and Slavin’s article illustrates this market perspective is ten years out of date. For all muni issuers reading this, what’s your plan to reach more investors directly?

Municipal issuers benefit greatly when they connect to and engage with bond investors. Investors always appreciate it when they can find the most current information quickly. Having and executing a superior investor relations (IR) strategy is key to helping issuers deliver this information easily to investors. And in today’s busy and crowded (thus, competitive) muni market, getting this right can help issuers gain an edge when taking their bonds to market.BondLink has touted the vast benefits to municipal issuers of a dedicated investor relations website to connect and engage bond investors. The BondLink platform makes many of the best practices from the corporate and equity markets instantly accessible to muni issuers. And we’re still just getting started.We recently released a trio of enhancements to our market-leading platform, and they’re already gaining traction among our clients. One of these important new capabilities is Digital Roadshows.How much do you spend on roadshows when you come to market? What if you could put that money back to work in your community instead?At NO EXTRA COST to BondLink clients, our client issuers can work with our customer success team to develop slides, record voice-over and host investor presentations directly on your BondLink-powered IR site. This brings your presentations right to the people – the investor community – where it can make an impact! Plus the dollars you would traditionally spend with typical vendors for a roadshow can redeployed to other areas.Part of my role here at BondLink, as I’m based on the West Coast, is to attend industry events – such as the recent Washington State GFOA conference. As a former issuer, I truly understand the difficulty many leaders face coming to market and attracting the highest numbers of buyers to achieve the lowest borrowing costs.In the numerous conversations I had at the conference, I was amazed to discover that issuers simply are skipping the step of providing a roadshow for investors. “The costs are too high” or “we don’t see the value” kept coming up as rationale. Yet, most of these issuers who weren’t producing a roadshow, were producing agency presentations. Quite literally, the information is already put together; it just needs to be formatted for the investor!It became clear that there a remains a belief that the deal’s credit rating is the end-all, be-all for a successful bond sale. Our point is, if you’re putting this together for the agencies, why not offer it up to the investor community? Fundamentally, it’s all public information. Why is it OK to share with ratings agencies, yet not with the people who will actually be buying your debt?Investors presentations are an invaluable opportunity to tell the buy-side the complete story of your credit, your deal and your projects. It’s extremely prevalent on the corporate side, and in my experience, a terrific way to broaden and diversify your investor base. And now with BondLink, you can get all the value of a roadshow without any additional cost to your community.As we’ve seen in the sales calendar the last couple weeks, deals of all shapes and sizes – and ratings – are available to investors. Issuers need to find a way to stand out from the crowd. Your BondLink-powered IR website is a great first step. Now let’s turn your agency presentation into an informative investor roadshow, and host it right on your dedicated site. You know how to tell your story, and now you can take it right to your investors as well.

The Boston-based firm announced digital enhancements for investor communications, treasury management and disclosure compliance.

The Virginia Public School Authority will competitively issue $110 million of tax exempt school financing bonds on the heels of launching four new investor relations websites to increase transparency.

As many of you know, last week we hosted the Municipal Finance Leadership Summit 2018, an event that was truly unlike any the industry has seen. The entire leadership summit was geared towards investor relations, a topic that is significantly undervalued in our market. And like everything we do here at BondLink, the objective was to empower issuers with information and tools to help them more efficiently access the capital markets. Issuers participated in numerous roundtables with investors and other leaders from around the market. For example, Tom Paolicelli, who as an issuer for New York City Municipal Water Finance Authority hosted as well as attended numerous investor events, moderated a panel with Brandeis finance professor Dr. Dan Bergstresser and the World Bank’s Urvi Mehta to discuss the expanding investor base for Green Bonds, with a focus on post-financing impact reporting. Director of the SEC’s Office of Municipal Securities (or OMS), Rebecca Olsen, delivered a keynote address outlining OMS’ focus on transparency and market integrity, including announcing its first Disclosure conference to be hosted in December at its headquarters in Washington, DC. Capping the Summit’s coverage on oversight and legal issues, bond attorney Dan Deaton, a partner with Nixon Peabody, detailed a clear legal framework for issuers in terms of their communication with investors. BondLink CEO Colin MacNaught led a lengthy Q&A session with two VP’s of investor relations for Fortune 500 companies. BondLink’s Director of Marketing Dave Lewis took issuers on a tour of the marketing world and presented ideas on how to employ marketing strategies to bond sales. John Murphy worked with Fidelity’s Jae Chung to help issuers in the audience better understand what investors wants from issuers, both at the time of a bond sale and in between offerings. I had the pleasure of moderating a panel on how issuers can best work with the financial press and was joined by John Hallacy of The Bond Buyer and Cate Long of Puerto Rico Clearinghouse. “So many of the topics that were presented simply never come up at other industry events,” Tom and Murph explained to me. “And they really go to the heart of how to improve bond sales – and ultimately optimize borrowing costs.” More than the presentations themselves, attendees enjoyed an interactive discussion with the speakers, engendering an energetic, engaged and educated audience. Here’s an example of the feedback we received on the event. Be sure to check out the latest episode of our podcast, MuniLand, to hear more. Vanguard’s Akiko Mitsui: "A variety of different perspectives on disclosure in the marketplace. From the Compliance Disclosure about green bonds, to the way that public companies view disclosure and investor relations, to some of the legal issues affecting the municipal marketplace disclosure, all of these differing perspectives together have really made me think it really was a fantastic event." And that’s just a sampling. If you couldn’t be there, we’re already prepping for Municipal Finance Leadership Summit 2019. You won’t want to miss it again.

The Indiana Finance Authority said increased transparency on its sale of $292 million of new-money, state revolving fund bonds with a green designation drew new investors to the table, driving up demand.

One of the core tenets of our work at BondLink is to empower issuers in the municipal bond market to do more in order to optimize their bond financing programs. “Doing more” includes things like being as transparent as possible with investors through the dissemination of timely data, making that data as accessible as possible through a dedicated investor website, providing greater access to bond sales to non-traditional investors like retail, and incorporating analytics to better understand trends on the buy-side.Since going live in November 2016, we have built an incredible network of highly sophisticated issuer-clients who are eager to provide efficiency gains to investors as a way to stand out in a very crowded bond market. These issuers are located all across the market, from states to utilities, universities, school districts, counties, cities and towns. Some of our clients are large and frequent issuers, others are small and infrequent. Some have three AAA ratings, while others are underrated or even unrated.Despite the difference in size, sector and credit quality of our clients, the common denominator of each of these issuers is the superior individual finance officers responsible for their respective bond programs. They are “leaning in” to the tools provided by BondLink because they want to lead the market and price their bonds are efficiently as possible, and they know there are sizable returns over time to an investment in greater investor outreach.We do everything we can to help distinguish our issuer-clients to bond investors, and this week includes two big investments on our end to further that objective. On Wednesday, Oct. 10, we will be hosting our inaugural leadership summit focused on IR best practices. This event was created to provide a forum for issuers and investors to discuss issues that are rarely covered at traditional bond market conferences yet offer tremendous value. We will also be unveiling a number of new features to the BondLink platform on Wednesday, which I will detail in a subsequent post.Here's a preview of some of the roundtables at the Leadership Summit:David Lewis, BondLink’s Director of Marketing, will lead a session on how to develop a marketing plan with the goal of raising awareness for a bond sale. This will cover reaching out to both institutional and non-traditional investors;We’ll have a round table with two corporate VPs of Investor Relations, providing issuers with their perspective on how to maximize an issuer’s return on investor outreach;Brendan McGrail, BondLink’s Director of Communications, will lead a panel of reporters/journalists on how issuers can work more efficiently with the financial media; andDan Deaton, a partner at the law firm of Nixon Peabody, will outline how issuers can develop a clear legal framework for communicating with investors.The bond market needs to move forward in terms of overall efficiency, greater transparency and the wider use of technology. That evolution has to come from issuers, and we believe our clients are the first movers. As interest rates move higher, the issuers who provide efficiencies to their investors will do better than those that don’t.

In Shakespeare’s "Julius Caesar," a fortune teller warns the Roman emperor of bad things to come on a specific period of the calendar. The warning was not heeded, and poor Julius was murdered by Brutus and his fellow Senators.Stakes aren’t as high but some warning signs started blinking last week for issuers. First, long-term yields started to widen significantly. On Thursday, the 30-year MMD hit a yield of 3.20%. That’s 17 basis points higher than it was three weeks prior, reflecting a steepening of the yield curve that will translate into higher costs for issuers needing to access capital on the long-end. According to a story by Bloomberg’s Danielle Moran, investors on the long-end this month experienced the highest loss relative to other maturities due to the market’s downturn.The spike in 30-year rates was coupled with more data that indicates the investor-base on the long-end has weakened considerably. According to Michelle Kaske, banks have sold close to $27 billion of their muni holdings over the first two quarters of 2018, the first time these investors have been net sellers in over eight years. This should be really concerning for any issuer needing to access large amounts of capital on the long end, as banks and property & casualty insurance companies are the two most important buyers. Both of these investors have stopped buying – only banks right now are sellers, according to Fed data – due to changes in the corporate tax code.The first story from last week might be a short-term blip – a little bit of rate volatility. Or it might be a result of the second story. Market risk is always going to be present for any issuer, and good ones know how to be proactive to hedge or minimize that risk – like adjusting the method of sale. But the longer-term warning sign indicates we’re in a new bond market and the investor base is very thin. Not adjusting for this new reality is like Caesar brushing off the fortune teller.

The Unified Government recently reached out to investors through the BondLink website, a resource that connects investors to bonds that the UG is offering.

As a former issuer, I know firsthand the challenges of alerting and attracting investors to a bond sale. In my role as Executive Director of New York City Municipal Water Finance Authority, I had the resources to institute a sophisticated and robust investor outreach program, but we had to do it all manually – planning our annual investor event and organizing tours, sending invitations, and meeting one-on-one with investors. I couldn’t help but imagine there had to be an easier way to reach more investors.And as the marketplace continues to evolve, the need for easier and more efficient investor outreach is becoming more important than ever. Just recently, Bloomberg’s Michelle Kaske wrote about the largest U.S. banks cutting their municipal bond holdings by more than $16 billion in the first half of 2018. The result of tax reforms is that these banks simply don’t need to hold as many munis. That means one of the biggest groups of buyers in a typical market is no longer as reliable for an issuer. What do you do?If you’re an issuer looking to lower your borrowing costs, you have to drive demand for your bond sales. And with banks holding fewer munis, you have a lower number of buyers to attract. I joined BondLink less than two weeks ago, and every day I come to work I’m more and more confident that this company is the answer to these new market dynamics. BondLink provides the tools issuers need, from a customizable IR website, to unlimited roadshows hosted on the site, and investor analytics that enable issuers to better understand their bondholders’ interests. And all of this creates dramatic efficiencies across the market.Plus, the BondLink platform enables issuers to tell their own story.If you’re an issuer who doesn’t communicate directly with bond investors, then investors will turn to the only other source to provide context for the raw data they are consuming: the rating agencies.Rating agencies are a necessary and important part of the process of accessing capital. The need of investors to garner a third-party evaluation of an issuer is never going to go away. Like the reviews of a product offered on Amazon.com, rating agencies’ opinions of an issuer’s creditworthiness help buyers evaluate a bond offering. But most importantly, investors want the agencies’ context for the issuer’s numbers and the interpretation of the numbers.Despite the value of ratings, leaving that role up to the rating agencies is a shortcoming that can create a big exposure for issuers. Rating agencies will interpret an issuer’s financial position based on their own criteria, which can change over time. They can also emphasize one aspect of an issuer’s fundamentals and not another, and they often don’t really measure what’s not seen.It's easy to see that I’m excited to be here. I’m looking forward helping issuers realize the massive long-term impact of a robust investor outreach program, and I’m thrilled to know that the market finally has a single tool that can help issuers optimize their borrowing costs.

I know a lot of people dread September because it represents the end of summer, but it’s one of my favorite months of the year.There are a couple of reasons for this, including the fact that my kids go back to school (finally). The weather in Boston is near-perfect this time of year as well, with the humidity abating. But September also kicks off the stretch-run in baseball.  As part of that final push of the baseball season, each team is allowed to expand its roster in what is known as the “September Call-Ups.”Here at BondLink, I’m thrilled to announce our “September Call-Ups” for 2018, all with deep experience in the muni market: Tom Paolicelli, John Murphy and Brendan McGrail. We’re not driving toward a pennant or anything like that. We’re scaling our business to provide more tools and technology in order to bring issuers and investors together more efficiently.Their areas of responsibility at BondLink – on issuers, bond investors and communication, respectively – speak to the company’s mission to move the bond market forward through enhanced transparency.Tom’s focus will be on issuers as he brings more than two decades of experience in various roles. He was most recently the Chief Deputy Treasurer for the County of San Diego, overseeing the Treasury and Investment Division. Prior to joining the County, he was the Executive Director of the New York City Municipal Water Finance Authority, one of the largest financing entities in the U.S. during its most active period, issuing over $30 billion in bonds. He was also a Vice President/Senior Analyst for Moody’s Investors Service in their U.S. Public Infrastructure Team. Tom was also active in the GFOA, an incredible organization of issuers that develop and recommend best practices. Tom was on the GFOA’s Treasury & Investment Management Committee and Online Financial Transparency Taskforce.John’s focus at BondLink is on developing tools and solutions for investors, after having spent nearly three decades on the buy-side. He joins BondLink from Fidelity Investments, where he was a senior bond trader and later senior research analyst in a career spanning nearly 20 years. He previously served as vice president in trading and structured products for J.P. Morgan Securities after working as an associate with Banker’s Trust.Disclosure is not as effective if it’s not communicated effectively, and that’s Brendan’s area of expertise. He spent most of the last decade in corporate communications with J.P. Morgan, and previously wrote the daily municipal bond market column as a reporter for Bloomberg News. He most recently served as Director of Communications for a private ski resort in Vermont and also worked as a writer for Massachusetts Governor Mitt Romney after beginning his writing career with the Worcester Telegram.We’re thrilled to have individuals who are that accomplished and experienced to help BondLink continue to meet the growing demand for our suite of products.You can read more about BondLink's "September Call-Ups" in The Bond Buyer. 

They are Tom Paolicelli, senior manager of business development; John Murphy, senior manager of investor relations and outreach; and Brendan McGrail, director of communications.

The new site is designed to drive participation in MassHousing’s municipal bond financing programs by improving investor outreach. The site also continues MassHousing’s efforts to enhance disclosure and transparency for investors.

Investors and issuers got two different messages out of Washington in the past 10 days or so, both pertaining to approaches to disclosure to markets. One is a really bad idea to make certain investor disclosure less frequent; the other is a very good enhancement of disclosure requirements in the municipal bond market.First, President Trump tweeted that he has directed the Securities and Exchange Commission to study whether to shift public companies’ reporting to a semiannual schedule from quarterly public reporting. The theory is that quarterly reporting discourages firms from making long-term investments. According to the Wall Street Journal, the SEC has required quarterly earnings disclosures since 1970 in order to protect public investors and enhance corporate accountability.Requiring less frequent disclosures is a really bad idea for any market and can lead to less liquidity, higher transaction costs, less certainty in valuations, and more opportunity for insider trading with longer dates between public reporting. There is also very little evidence that quarterly reporting has hindered the ability of long-term focused companies from raising capital. For example, pharmaceutical and biotech companies are able to raise capital efficiently despite drug pipelines that can be many years long. Amazon is another example. CEO Jeff Bezos is famously long-term focused, and yet the company has a market cap of over $929 billion. In every one of his annual letters to investors since 1997, Bezos has reminded investors that the company will plow resources back into research and development."…We believe that a fundamental measure of our success will be the shareholder value we create over the long-term…We will continue to make investment decisions in light of long-term market leadership considerations rather than short-term profitability considerations or short-term Wall Street reactions...”More frequent reporting improves the efficiency of public markets, whether it’s the stock market or #muniland. The President has the right to ask the SEC to study whether there are indeed benefits to less frequent reporting, but I suspect the study will come up empty.Just a few days after the President’s tweet that seemed to encourage the idea of less frequent disclosure, the SEC broke its own news with a statement that it has finalized amendments to Rule 15c2-12. Currently, this rule defines 14 material events that issuers have to disclose to bond investors.With the latest amendment, the SEC is requiring further enhancements to disclosure in the muni market. To wit, the disclosure of bank loans and private placements. We’ve written before about the need for issuers to disclose these obligations. They’ve exploded in popularity with both banks and issuers partly for their lower cost and efficiency of execution. However, these agreements typically involve large sums of public dollars, and can include provisions like acceleration that could give a first lien over bondholders.Like the comment above about the President’s tweet, I think the focus for issuers should always be long-term. Your relationship with your bond investors are long-term, as you will be relying on bondholders to buy your bonds over the next 50 or 100 years. If you think a private placement is in the best interest of your bond program and your constituents, by all means pursue that structure. Just disclose the fact that it was executed and disclose its terms.Credit goes to the MSRB and its former chair, Nat Singer. Nat is one of the smartest people in #muniland, advising some of the top issuers in the market. When he was chair of the Municipal Securities Rulemaking Board in 2015 and 2016, it circulated a concept release to see whether it should require municipal advisors to disclose information about their issuer clients' bank loans in reaction to the plethora of private placements getting done. This got the ball rolling. As such, I will now refer to this rule change as the “Nat Singer Enhancement to 15c2-12.”Officially, the compliance date for the rules will be 180 days after they are published in the Federal Register. But issuers should recognize the long-term importance of disclosing these agreements and start to voluntarily post them to EMMA and their investor websites as early as possible.

When you’re an issuer, it’s really hard to measure the effectiveness of the myriad decisions you have to make in managing your bond programs. For example, when I was an issuer, I struggled to measure if I made the right decision to advance refund bonds. Did I time it right or did I waste the option by pulling the trigger too early? On a pre-sale basis, I’d also often wrestle with bond structuring decisions, such as couponing. Should I have pushed for a lower coupon on that bond? Or, should I have stuck with a 10-year par call option, or instead tried for shorter calls?Literally scores of decisions that could greatly impact how your bonds price in the market, and consequently the cash flows required to repay the bonds over two or three decades, and yet there was virtually no mechanism to isolate the cost/benefit of a single decision. I think the lack of market signals on these decisions is probably why a lot of issuers follow the status quo when issuing bonds. The default option seems to be plain vanilla fixed-rate bonds with 5% coupons and a 10-year par call.All of these questions fall into a catch-all of “Can I get paid for making better decisions?” I’ve written in The Bond Buyer and previously in The Fisc about issuers getting “paid” by investors for having better disclosure and transparency. To put it more succinctly, the question comes down to “Will the bonds I’m responsible for issuing price better based on the decisions I make in the structuring phase of the financing?” It’s an incredibly important question for all public sector debt managers to ask themselves.Some new and exciting research provides very positive market signals for issuers thinking about issuing Green Bonds. Researchers Malcolm Baker, Dan Bergstresser, George Serafeim and Jeffrey Wurgler released a draft of their white paper, “Financing the Response to Climate Change: The Pricing and Ownership of U.S. Green Bonds” at the recent 2018 Brookings Municipal Finance Conference last month. You can read it here.The research paper provides an overview of the U.S. municipal bond market covering 2,083 Green Bonds issued between 2010 and 2016. The issuance of bonds identified as “green” rose from less than $500 million a year in 2010 to over $2 billion in 2014, totaling $6.5 billion in 2016. The authors point out that most of the bonds are self-labeled as “green” by issuers due to a lack of a standard set of definitions in the muni market, and the bonds’ purposes include a wide variety of projects that were intended to be environmentally beneficial.The results of their analysis are very powerful: Green Bonds are issued at a premium to otherwise ordinary bonds – that is, with lower yields on an after-tax basis. They estimate the pricing advantage at six basis points, or an amount equal to about half of a bond credit rating notch, according to their study. To quantify this using some very conservative estimates, on a $100 million bond sale with level debt service over a 30-year maturity, the present value of a reduction in the True Interest Cost (or TIC) of six basis points is worth nearly $1 million to an issuer. That’s real money. Further, Green Bonds that are certified by a third party like the Climate Bonds Initiative price at an even higher premium.The “why” to this pricing advantage flows into a second meaningful benefit that should get the attention of issuers looking to diversify and grow their investor base: Green Bonds ownership tends to be concentrated with investors who are not just seeking yield, but also seek to invest with some measure of social responsibility. To quote the authors: “A subset of investors appears willing to sacrifice some return to hold green bonds, particularly ‘certified’ green bonds. Green bonds are held disproportionately by these investors.” To put it another way, if you issue Green Bonds there is a good chance your bonds find their way to new investors. That diversification is very valuable over the long-term.This is critically important research given how fast the Green Bonds corner of #muniland continues to grow. And it’s exactly the type of research that could drive capital budgeting decisions all over the country. Investors are sending signals to governments that they value the opportunity to invest in environmentally beneficial projects. Issuers should recognize those signals and adjust accordingly, but so should the policy makers like the governors and mayors who determine which projects receive capital funding.

The new site is evidence of its commitment to transparency, the state's finance secretary says.

Sun. Sand. And Shark Week.As millions of people enjoy the beach during summer vacation, Discovery Channel delivers its annual reminder that many things – some potentially harmful, and some just downright scary – may lie beneath the surface. It’s a good analogy for municipal bond issuers when it comes to current and future interest rates.Two weeks ago, Heather Gillers wrote a great article in The Wall Street Journal on how attractive interest rates are right now for bond market issuers. You can read it here. She’s right. The 30-year borrowing rates remain at or slightly below 3% according to the Thomson Reuters MMD scale. By contrast, 30-year mortgage rates are 4.625%, roughly 160 basis points higher. Issuers should take advantage on the continued low interest rates for as long as they last.Heather’s article also pointed out one of the big reasons why this is occurring: the supply of new bonds in 2018 is significantly lower due to some accelerated 2017 borrowing. Through mid-year, supply is down 17% year-over-year, and Citigroup is expecting that the 2018 total issuance number will be 25% lower than in 2017. Supply is so low that net supply, the amount of new bonds being issued compared with outstanding bonds maturing, has been negative. This has led to an environment in which investors are grabbing for bonds and driving down interest rates.So, on the surface, the bond market – like ocean waters – appears placid and safe. But what’s below the surface? Are dangers lurking that issuers should keep in mind?Yes.The primary driver of current interest rates is lack of supply. It’s masking other rip currents in the market that lie unseen below the surface. To wit, major traditional buyers of munis have stopped buying in 2018 because of new tax code changes. In other articles, Amanda Albright of Bloomberg noted that property & casualty insurers have stopped buying munis. According to Fed data, these buyers currently hold over $340 billion in tax-exempt bonds. Bloomberg’s Michelle Kaske reported that major Wall Street banks have stopped buying munis for the first time since 2009.The key takeaway for issuers is that there are risks in the municipal bond market. There is likely a higher cost of capital lurking beneath the surface. We’ll probably see it when supply of new-issue bonds in the market reverts to traditional levels. In other words, issuers should beware the unseen “swimming sharks” and other potential dangers. You may never get bit, but isn’t avoiding an injury preferable to surviving one? Issuers can and should remain mindful of hidden dangers and take smart action to ensure their future debt financing is a success.

Georgia’s annual GO infrastructure bond sale prices competitively Tuesday. The deal consists of $840.6 million of tax exempt, fixed-rate bonds and $389.1 million of taxable bonds.

Green bonds help governments finance environmental projects. It's unclear whether they help governments' finances.

Danbury, Connecticut, has launched an investor relations website, BuyDanburyBonds.com, in advance of a $39 million sale of bonds and notes.

It’s been two months since the GFOA hosted its 2018 annual conference in St. Louis, and, before it gets too far in the rearview mirror, I wanted to offer a few takeaways for issuers.The conference was excellent overall. Given the huge success of the GFOA’s 2017 conference in Denver, I thought going into the 2018 event that St. Louis had its work cut out for it to match. It delivered big time. The GFOA did another terrific job packing the schedule for issuers, including timely sessions on topics such as the new normal for the municipal bond market post-tax reform. The sessions were augmented by speakers who really framed success for members. Kudos to Chris Morrill and Pat McCoy for putting together a great event.The GFOA’s annual conferences continue to get better and better, and if you’re an issuer and not regularly attending this event, you should give it a try in 2019 when L.A. hosts the next one. You’ll come away more knowledgeable and energized from the interaction with your finance colleagues from around the country. It’s a tremendous amount of professional development packed into three days.Again, comparing the 2018 conference with 2017, I didn’t think the keynote in Denver (Jim Collins) could be matched in terms of offering valuable advice and perspective to public sector CFOs. But the address by New York Times columnist Thomas Friedman was outstanding.I wanted to highlight a theme that was covered by Friedman in his presentation to the membership. He covered several aspects of his new book, “Thank You for Being Late,” and I was particularly struck by his message about the differences between stocks and flows.When I hear the term “stocks and flows,” I think about a balance sheet and an income statement. Or about a bathtub and a faucet. Friedman was talking about stocks and flows in the context of trade and culture and information. He pointed out that most of the big and enduring cities in the world are built near water, either streams, rivers or the ocean. Why? Because water brings life. Running water can provide energy and bring fertility to the ground, but also to society. He tied this back to some of the most successful technology companies of today -- they are built close to the flows of information and tap into it.This concept of stocks versus flows is also meaningful for issuers who are looking at how best to attract more investors, diversify their investor bases, and position themselves to issue bonds successfully for the next 20 or 30 years. The new dynamic in the muni bond market -- driven by investor demands, stepped up regulatory concerns, and a more expensive yield curve -- requires issuers who want to be successful to do more when it comes to their investors.By “do more” I mean provide bond investors with a better experience and with real efficiency gains. This starts by thinking of investor disclosure as a flow, not as a stock. Producing a thorough and easy-to-read Appendix A to your POS prior to your next bond sale is a stock; providing a stream of current data and documents to investors in between bond sales is a flow. The stock is important and meaningful, but it represents a quantity or quality existing at a single specific point in time in the past. For issuers, this might mean your financial position as of the month prior to the bond sale. A flow by contrast, is all of the financial data that you or your government produce over time. It shows investors the changes over time. That’s a lot more valuable.Investors need and want that flow of issuer information; they want to open the faucet and receive a steady stream. Successful issuers know that it’s a much more valuable investment to establish a good disclosure flow, rather than simply fill the tub when it’s time to issue bonds.I welcome your thoughts.

In a decision that has been long anticipated by state and local governments, the Supreme Court last week sided with governments that want online retailers to collect state sales tax from consumers. In South Dakota v. Wayfair Inc., the Court voted, 5-4, to overturn the outdated physical presence standard in the 1992 Quill ruling for the collection of state sales taxes. Kudos goes to organizations like the GFOA who have been pushing Congress for a more equitable and streamlined tax system when it comes to sales tax. Congress never budged, but the Courts finally did.GFOA members stand to benefit greatly as this is a pretty positive turn of events for state and local governments. For decades, governments have lost billions of dollars in tax revenues as more and more consumption in the U.S. moved online, away from brick-and-mortar stores. The early boom of e-commerce was fueled in part by the fact that goods purchased online were less expensive than the same goods purchased in a store because, for the most part, sales tax was not being collected by online retailers. Writing for the majority, Justice Anthony Kennedy cited a study that estimated the loss of uncollected tax revenue at $33.9 billion annually.Which leaves us with an interesting question: What to do with an estimated $34 billion in new annual revenue?Governments have a number of options. They can immediately factor in those new annual revenues into operating budgets; they can use the new funds to pay down liabilities or increase reserves for a rainy day; or they can dedicate them to one-time infrastructure investments.If the choice is investing, a government could pledge of portion of new internet sales tax revenues for a bonding program, while the remainder could be used for pay-as-you-go capital projects such as a preventative maintenance program. Bonding is all about leverage. Pledging these revenues would enable governments all over the country to jump start capital projects and generate myriad new construction jobs. Assuming a 3x coverage test, $34 billion in new annual revenue would generate about $175 billion in bond proceeds that could be used for critical infrastructure needs like schools or bridges.Of course, these revenues will not flow to a single government that would have the ability to issue bonds against them – 45 states have a sales tax. But it’s a very positive development, and governments should consider where best to deploy these new funds for the long-term benefit of their constituents.

The new investor portal was announced by General Treasurer Seth Magaziner. With thousands of pages of data, Rhode Island's new investor portal provides insight into the credit fundamentals…

The annual Infrastructure Week is once again in the rearview mirror, and we hope our social media posts have helped to contribute to the discussion on one of the most important topics facing our country.We mentioned last week that repairs to our roads and bridges are infrastructure projects we can all get behind. This week we wanted to mention one more: our schools.As our economy and employment base continues to evolve, it’s imperative that our public schools evolve with it. That means not only the curriculum, but also the facilities themselves. Everyday nearly 50 million American kids attend public school in about 100,000 facilities, according to the American Society of Civil Engineers (ASCE). ASCE estimates that roughly a quarter of all K-12 schools are in “fair” or “poor” condition. That’s not where this country should be when it comes to the condition of our schools. The annual funding gap – ASCE’s estimate of a financing gap – is $38 billion. Most of that will have to come through the issuance of bonds.The Massachusetts School Building Authority is the state-level issuers of bonds for public school construction throughout the Commonwealth, having contributed more than $13 billion towards school repair and new construction. The State of Georgia is coming to market with $1.2 billion in bonds next month, with plans to fund nearly $500 million for higher education and another nearly $400 million for K-12 projects. In Rhode Island, voters in November will vote on a $250 million bond issue that was part of the governor’s budget proposal this year. If approved, it will mean a quarter billion dollars in the Ocean State will fund things like science and engineering facilities, early childhood education, and bringing existing facilities up to date.We inevitably get cynical when it comes to discussing government, but isn’t it obvious that we need to invest more in our K-12 school facilities if we want to maintain the level of growth, wealth and discovery that we’ve all come to expect? The States of Georgia and Rhode Island are just two of many thousands of issuers throughout the country that access private capital in the municipal bond market to improve education for our children. There’s a lot of buzz right now around sustainable investments, but what’s more sustainable than bonds used to fund the schools where our next generation of our leaders with learn?BondLink is looking forward to Infrastructure Week 2019 already, and we hope these discussions continue until then. It’s #TimetoBuild

New Rhode Island Treasurer Seth Magaziner touted a $175 million debt restructuring and a green-themed Infrastructure Bank as progress for the state.

As the treasurer for the country’s fourth-largest school district, Tony Vu says his goal is to lower borrowing costs for a voter-approved $1.2 billion general obligation construction program in south Florida.

BondLink is excited to celebrate the sixth annual National Infrastructure Week. It truly is #TimetoBuild.We’ve written more than once on our disappointment in the so-called infrastructure deal unveiled by the Administration earlier this year. That proposal lacked substance, lacked speed and lacked scale – three things that a true infrastructure plan needs to succeed. From top to bottom, our country is in desperate need of infrastructure investment. The American Society of Civil Engineers gave America’s overall infrastructure a grade of D+ in 2017, illustrating the relatively poor condition and performance of the country’s infrastructure.There are so many opportunities to improve. Think about it. How was your commute to work today? Was traffic stalled on the highway? Was your train slow? And public schools: what condition was your children's school in this morning when you dropped them off?Let's start with infrastructure repair that everyone supports: better roads and bridges. Every year, it seems, highways are more jammed with vehicles and public transportation gets slower. We can do so much better. And we have an amazing tool at our disposal. Municipal bonds offer the cheapest way to finance the new infrastructure that the U.S. needs, and this is a great week to highlight and promote policies that support the growth and development of the muni bond market. It starts and ends with more tools for issuers: first, resurrecting the Build America Bond program to enable issuers access to a greater pool of capital; second, enhance the Federal Highway Trust Fund to finance road, bridge and surface rail transportation projects across the country; and third, flexibility with the tax code to allow for things like advanced refundings or the ability for issuers to reopen an existing/outstanding CUSIP to enhance the liquidity of their bonds.And beyond the discussion of tools for issuers, let’s get into tools for investors. How do we encourage more investment in these infrastructure projects? How do we make financing public projects as compelling for individual investors as watching the stock ticker on CNBC? The answer is simple: issuers should take steps to connect investors with the projects their bonds are financing. And beyond the initial bond financing, issuers should incorporate technology to enable a strong social connection with these projects by proving ongoing project updates. This is easily achievable with a dedicated investor platform like Bondlink. And this week, through our social media channels, we’ll be highlighting projects our clients are undertaking, and showing how effective their investor relations sites are at keeping bondholders informed.

The city expects to begin issuance in 2019 and continue pricing deals over five years.

The new site is designed to drive investment in the Massachusetts capital.

Seaport-based BondLink Inc., a software startup that helps municipal bond issuers connect with investors, has found its latest customer close to home — the city of Boston on Thursday launched a new investor relations website powered by BondLink.

The muni bond market has been impaired to some degree over the last two decades due to the lack of disclosures around various financing structures. Think of interest rate swaps and auction rate securities.Issuers embraced these less-than-vanilla structures as low-cost alternatives to plain-vanilla, fixed-rate bonds, jumping right in for the cheaper financing. It proved profitable for Wall Street, but bond investors were generally kept in the dark in terms of the disclosure of their existence and the legal provisions underpinning them.Since the Financial Crisis, the new exotic structure has been so-called direct placements, which are private loan agreements between a bank and an issuer. Like swaps and auction rates, issuers have used them extensively. Market participants estimate that more than $60 billion in private placements are currently outstanding. In most cases they don’t meet the definition of a federal security, therefore they generally fall outside the disclosure requirements of the SEC and MSRB, and it’s been hard for investors to receive timely disclosure of these debt-like structures.The credit risk? That the private agreements may contain acceleration provisions that push the bank acting as the lender in front of all bondholders.The Governmental Accounting Standards Board (GASB) last week released new guidance “designed to enhance debt-related disclosures in notes to financial statements, including those addressing direct borrowings and direct placements.” This is valuable and important guidance to issuers. But because the vast majority of muniland bond issuers conduct only annual audits, GASB’s guidance to outline these agreements in the notes to the financial statements – literally the footnotes of documents that can run over 200 pages – is only a half-step because it does nothing to spur contemporary disclosure.Why? The key is timely disclosure.Imagine an investor analyst who is responsible for the credit surveillance on 100 or more issuers. If one of their issuers comes to market with robust primary market disclosure for its once-per-year issuance, chances are that analyst won’t get fresh, timely disclosure for another year – when the issuer comes back to the bond market. Even then, the investor probably wouldn’t get full access to all of the terms and provisions of these agreements.What’s the solution? Market signals from investors.Short of a change to 15c2-12, issuers won’t be required to provide these agreements to investors. But some will do so voluntarily – those that “get it” when it comes to the importance of timely disclosure and those that follow GFOA and NFMA best practices. Those are the issuers that should get access to the lowest cost of investor capital.We think it’s a good thing if investors can send signals to issuers about disclosure practices. It may be an unavoidable growing pain for the market’s future if issuers are bucketed into those that disclose and those that don’t.

S&P boosts Wayne County bond rating to investment grade

The county said in a statement that it launched the website to better connect with investors about bonds it offers and tell the story of its turnaround.

After questioning “Where’s the beef?” last week as we reviewed the Administration’s infrastructure investment plan, we’d be remiss not to provide our recipe this week. Our unsolicited advice for the White House & Congress: If you want an infrastructure plan to have scale and speed, use existing channels.I filled up my gas tank on Sunday to the tune of $46.88. I know that I paid $2.95 per gallon – about half the cost of a gallon of spring water – but I have no idea what I paid in federal and state gas taxes. This admission comes from someone who has issued over $1 billion in gasoline taxes.Most motorists don’t do a calculation of the spilt between the cost of the gas and the tax levied on top of it; they focus solely on the affordability. And relatively speaking, gasoline in the U.S. is very inexpensive. The federal levy on gas itself is also relatively inexpensive.The federal government collects roughly 18 cents per gallon on regular gasoline. These funds – a total of nearly $36 billion in 2015 – are collected in the Highway Trust Fund and then are apportioned and returned to each state. States use these critical funds to pay for the construction and repair of highways, roads and bridges.The program has been in existence since 1956. Through wars and recessions, government shutdowns and rescissions, the program has worked extremely well to finance the most basic and arguably most important piece of public infrastructure: roads. And it’s a great example of how the federal and state/local relationship can work efficiently. Who in this country doesn’t support better roads?The big challenge to this program is that the tax has not been adjusted for nearly 25 years. It was last increased – to its current level of 18.4 cents – in 1993. It’s a fixed levy, and not tied to inflation. So as cars have become more energy efficient over the past generation, less gas tax has been paid into the Trust Fund per mile. This has led to major underinvestment in road and bridge repair. According to the American Society of Civil Engineers, U.S. roads currently earn a grade of D.Americans tend to bridle at the mere thought of a tax increase, but according to the U.S. Chamber of Commerce, a 25-cent bump in the gas tax – phased in over five years – would generate nearly $400 billion in additional revenue that could be used to fund our needed infrastructure projects. It’s a fair user tax, and importantly, can turbo boost infrastructure very, very quickly.For nearly 90 years, the federal gas tax has done an extremely good job of helping finance roads and bridges throughout the country – and a lot of jobs. Maybe it’s time to beef it up.The other channel we had in mind for boosting infrastructure investment is the capital markets: Provide the tools for issuers throughout the muni bond market to access a deeper pool of capital. To wit, allow issuers In the U.S. to attract capital from the taxable bond markets, including non-domestic capital. Bring back the highly successful Build America Bonds program (BABs) – created under President Obama as part of the American Recovery and Reinvestment Act of 2009. For President Trump, we’d recommend a name change (“Make America Great Again” Bonds or simply MAGA – sounds catchy, no?) and creating the program so it’s free from future Congressional budget rescissions. We’re not going to touch that subject now.In 2009 and 2010, issuers from across the U.S. attracted new, taxable investors through the issuance of more than $180 billion in BABs. Foreign capital was slow to invest – in large part because the program was temporary and therefore the bonds would be less liquid.The program was specifically designed to spur new capital expenditure – not refinancing – and offered a tremendous savings to issuers over the borrowing cost of traditional municipal bonds. For investors, it was an excellent new asset class, offering generally stronger credit quality for higher yields than comparable U.S. Treasurys (and corporate bonds). This was the perfect vehicle for U.S. issuers to access new capital. New capital is what is needed to fund a massive increase in infrastructure investment. Currently, the muni bond market is a relatively captive market -- the same set of issuers sell bonds to the same set of investors, with the market cap remaining relatively stable.In short, there are already existing channels to help truly promote infrastructure improvements in the U.S. without forcing state and local governments to line up private funding. We have the beef; now let’s start cooking.

President Trump's visit to Ohio at the end of last week to promote his infrastructure plan left us revisiting the emotional rug-pull of the plan's original unveiling. As a child of the '80s, I had the classic Wendy's ad leap into my mind.From small towns to large states, municipal issuers across the country are in dire need of funding for critically important infrastructure projects such as roads, bridges, schools, mass transit, water systems, etc. The American Society of Civil Engineers has pegged the funding deficit of public infrastructure projects at more than $3 trillion.On the campaign trail and in his first year in the office, the President talked often about passing a $1 trillion infrastructure plan to "Make American Great Again." So, we were very surprised when the plan was actually unveiled last month. It relies heavily on public-private partnerships and the strategic use of $200 billion in federal funding to generate $1.5 trillion in matching local infrastructure spending.We just don't see it. The $200 billion in new federal funding falls far short of what is needed (and what was promised). And this comes on the heels of the federal tax cuts/tax reform, which included a repeal of an important tool for issuers (advance refundings) and changes to the tax code that resulted in a loss of a significant investor base in the muni bond market, specifically property & casualty insurance companies.The idea behind an infrastructure program is to stimulate new capital investments. A successful infrastructure plan therefore should provide scale and focus on speed. Move fast and build more projects than would be built in the absence of the stimulus. How? Boost funding, provide more tools not fewer, and use existing infrastructure investment channels.Keep an eye on The Fisc, as we will be focused on these last three components -- the infrastructure "beef" that the country needs.

We're excited and proud to partner with Fidelity because it's a leader in empowering retail investors through technology and research.

About 75 percent of all of the public infrastructure across the United States is built and maintained by state and local governments, who on average issue over $1 billion in bonds every day in the bond market.

Last month, the Climate Bonds Initiative released its annual report on Green Bond issuance in the U.S. Municipal Bond Market. It’s excellent, and we encourage all to read it.The data reveals an exciting trend: since the Commonwealth of Massachusetts brought the first $100 million to market in 2013, issuance of Green Bonds has soared. More than $11 billion in the debt was sold in 2017, up from just over $7 billion the previous year. The largest issuer is the New York Metropolitan Transportation Authority, followed by the State of California.But despite the amount of bonds issued to date, Green Bonds remain an emerging asset class, with issuers and investors finding their way in terms of definitions and criteria. Today, California State Treasurer John Chiang is taking a strong leadership role in gathering market participants to outline best practices for Green Bonds. He’s hosting a two-day Green Bond Symposium at the Milken Institute. Check out the agenda.In terms of the issuance process itself, issuers really need to focus on three things. First, they have to clearly define what they are considering a Green Bond. Second, they have to clearly outline their process and criteria for selecting environmentally beneficial projects to be financed by the Green Bonds. Third, and most importantly, they have to be committed to providing ongoing impact reports to Green Bond investors.The most efficient and effective way to do this is by harnessing available technology to interact with investors. By incorporating a BondLink-powered investor relations platform, issuers can easily provide ongoing status reports on their Green Bond projects on a regular basis to their investors (and taxpayers), with automatic updates and photos/videos being pushed to investors who have signed up for alerts.Like the project updates, issuers can develop written impact reports – acres of open space preserved, number of gallons of water cleaned, or miles of new rails laid for mass transit, for example – that can be automatically disseminated to investors. These details are an important piece of the investment for major investors who have dedicated Green Bond funds, such as Blackrock and State Street, but also for retail investors. The gold standard is the World Bank’s impact report.If you’re an issuer who is thinking about Green Bonds, it will pay to focus on impact reporting in the months and years after the initial bond sale. How that reporting is handled, and the ease of use for investors, is absolutely critical. 

A Las Vegas-area water district and water authority launched a new investor website ahead the competitive sale of $83.8 million in limited tax general obligation bonds.

The new website, which can be found at www.BuyCaliforniaBonds.com, is part of the state's enhanced disclosure efforts.

BondLink, a two-year-old startup offering a cloud-based platform for public agencies to sell bonds, has raised $10 million from investors.

As the city of Detroit works to rebuild its investor relationships, it got good credit news in the form of a one-notch upgrade from a second rating agency in as many months.

The Port of Los Angeles launched a new website Monday powered by Boston-based BondLink’s technology to provide bond investors with easy access to the port's financial data.

“The purpose of the Bondlink pages is to assist investors in quickly finding relevant financial information on the city of Milwaukee and Milwaukee Public Schools,” said Richard Li, public debt specialist in Comptroller Martin Matson’s office, which manages city and school borrowing.

On Thursday morning Fitch withdrew its B rating on the Virgin Islands Finance Authority's senior matching funds and gross receipts tax bonds.

Despite Government Finance Officers Association Best Practices on the benefits of investor outreach, the vast majority of issuers in the municipal bond market spend very little time communicating directly with investors or engaging in investor outreach. There are a lot of good reasons for this: take the general lack of resources of governments, or the demands of other aspects of a finance director’s job. It’s not a stretch to suggest that typical GFOA members probably spend something like 90% of their time working on budgets, audits and tax collections over the course of a year, and maybe 10% focused on accessing capital in the municipal bond market. However, a bond sale – even if it’s a once-a-year event - usually involves huge sums of public dollars. The interest costs associated with a bond sale are almost always locked-in for decades based on a single day’s pricing. And the channels to communicate with investors – things like investor websites - make it easy and cost effective even for small bond issuers to do well effectively. With the stakes so high and the channels to communicate available, issuers should engage bond investors in order to tell their story.If you don’t tell your story, someone else willThe above adage is directly relevant to issuers as they think about attracting more investors to their bond program. Investor outreach is all about telling your story as an issuer. It’s that simple: provide some context for the financial reporting that accompanies a bond sale or an annual disclosure filing. Not only does this foster differentiation from other issuers, but its critical to clarify technical and financial content for investors so they understand where a government is headed and how they will get there.If you’re an issuer who doesn’t communicate directly with bond investors, then investors will turn to the only other source to provide context for the raw data they are consuming: the rating agencies.Rating agencies are a necessary and important part of the process of accessing capital. The need of investors to garner a third-party evaluation of an issuer is never going to go away. Like the reviews of a product offered on Amazon.com, rating agencies' opinions of an issuer’s creditworthiness help buyers evaluate a bond offering. But most importantly, investors want the agencies’ context for the issuer’s numbers and the interpretation of the numbers.Despite the value of ratings, leaving that role up to the rating agencies is a shortcoming that can create a big exposure for issuers. Rating agencies will interpret an issuer’s financial position based on their own criteria, which can change over time. They can also emphasize one aspect of an issuer’s fundamentals and not another, and they often don’t really don’t measure what’s not seen.Let’s use debt burden as an example. For a general government, all of the rating agencies measure the affordability of a government’s outstanding debt. A lower debt burden is a credit positive relative to a higher debt burden. But what if an issuer has a low debt burden – let’s call it City 1 – simply because it is avoiding necessary infrastructure improvements? And conversely, a second government – call it City 2 – develops a high debt burden because it aggressively tackles its infrastructure needs while interest rates are low.If City 2 doesn’t provide context for its front-loaded capital program to bond investors, it is likely to pay a penalty relative to City 1 to access the market. The key takeaway for issuers is that the opinion of a rating agency should not be the only interpretation that finds its way to the buy-side community.Provide the context behind your government’s financial performance.To get a better sense of the value of telling your story as an issuer directly to bond investors, think about how you would go about describing yourself to a stranger. Would you simply hand him a copy of your resume? No, of course not. The resume would be a good starting point, but it would paint a very incomplete picture of who you are.Like a resume, a financial report or audit without context provides the investor an incomplete picture. And in the muni market, audits tend to be completed and published months after the end of the fiscal year, making the data very stale. Bonds are usually structured over many decades – 20- or 30-year bond issues are common. So if you’re asking for a long-term investment, it pays to provide investors with more than just stale historical financial documents.According to Rivel Research from 2013, investors in the stock market paid a median premium of 10% to those companies that employ effective investor relations, while discounting a company a median of 20% for ineffective investor relations. That’s a 30% swing in an investor’s valuation based on investor outreach. For a municipal government issuing bonds, that could mean tens of thousands or more of public dollars.Build your investor outreach program as if you were an investorInvestor outreach is not a short-term, one-off project to improve the pricing of your next series of bonds. No matter how big or small you are as an issuer, it requires a signal to the buy-side that you are a borrower that will help investors better understand your credit. But you should signal that you are committed to investor outreach for the long-term.It certainly helps to provide more data and more documents to the market as they become public and are shared with taxpayers and ratepayers. But it’s also important to inform and educate investors who may own your bonds for decades about that data. Why should an investor buy your bonds, and why should they buy now? Even if the news is bad – or perhaps more importantly if the news is bad – provide context to the data you are releasing in order to engage investors.The story you can tell to bond investors – including about the management team – should explain where you’re headed as an issuer and how you expect to get there. Bring alive your long-term financial and debt financing goals, and articulate what you trying to accomplish.In 2017, with the availability of channels to communicate directly with investors like investor websites, an issuer should do more than simply publish historical data in a POS. Use technology to efficiently let investors know every detail about you as an issuer, because if they do, the chances of them being long-term investors – and repeat investors – will go up.

Tallahassee, Fla., plans to price $150.3 million of energy system refunding bonds Tuesday.

Chicago has launched a new investor relations website to serve as a portal of city fiscal information and updates for investors, analysts, and the public alike.

Florida launched a new website Wednesday to enhance transparency and access to information about the state's debt.

Issuers of all types of securities – stocks and bonds – in all different capital markets around the world continually debate the value of investor relations. The debate comes down to this: is an investor outreach program a necessary cost, or is it an investment from which an issuer can expect a return on it’s investment over the long-term?The smart issuers view investor outreach as an investment. They proactively take steps to tell their story to the market, to make it easy for investors to understand their credit, and use every tool available to enhance and diversify their investor base. In return for their investment, these issuers know that they will see a return in the form of reduced cost of capital over the long-term. Enhanced transparency to investors may also help attract more buy-and-hold investors, increase the liquidity of the issuer’s bonds, and provide more stable spreads/bond valuations.In the municipal bond market, we have a good case study on the question of investor outreach as a cost or investment in the City of Saint Paul, the capitol city of Minnesota. Saint Paul issues bonds through several different credits. It’s main borrowing program, the General Obligation (or G.O.) bond program, is rated AAA/AAA by Fitch and S&P Global. It’s sewer bonds are also rated AAA by S&P Global.In recent months, the City has taken steps to improve the transparency of its financial operations. This included their debt financing program, and Saint Paul launched a new, dedicated investor website – www.stpaulbonds.com - powered by BondLink. CFO Todd Hurley and Treasurer Michael Solomon sought technology that would attract more investors to their bond program, including local investors like local banks, trust departments, financial advisors, and individual investors.Ahead of its competitive bids on March 8th, the City launched its new investor website. This was featured in The Bond Buyer, as well as the local Saint Paul and Minneapolis press. The City held a total of three competitive sales that day, of which two mirrored competitive sales sold in prior years based on analysis by City’s municipal advisor. According to the City, the number of bidders who participated in the bidding jumped by more than 20% for each auction.Good news on the number of bidders. But how were the bids?Despite the fact that the municipal bond market weakened every day that week with the AAA yield curve re-setting higher in yield every day, the bids came in substantially stronger than in prior years. For the $9.96 million G.O. bond sale, the City’s average spread to the AA scale was reduced by 9 to 12 basis points relative to prior years. On a present value basis using some back-of-the-envelope calculations, the reduction in borrowing costs on the G.O. bond sale ranged from $63,000 to nearly $85,000.For the City’s $7.795 million Sewer Revenue bond sale, bids were tighter on a spread to the AA curve basis of 12 to 24 basis points in different maturities. This is a reduction in interest costs of roughly $85,000 to $170,000 for Saint Paul’s taxpayers. These results are even more impressive because one of the rating agencies had recently assigned a ‘negative outlook’ to the rating on the AAA sewer bonds. But the City used its dedicated investor website to tell its story, and not let it’s story be defined solely by the rating agency. Taken together, the City’s reduced borrowing costs were over $250,000 on the higher end of the range.“BondLink was a tool that we used to increase transparency and drive investor interest in our bond sale,” said Treasurer Michael Solomon.” Even though the City has high bond ratings, the finance team is always looking for ways to reduce borrowing costs and we are very excited about the results of the first bond sales with the City’s new investor relations website in place.”Obviously, there are a number of different factors that go into how a bond prices on a given day. But it certainly did not hurt that the City had taken steps to attract more investors using their new investor website. They invested in investor outreach, and saw a strong return in the form of reduced borrowing costs.

St. Paul, Minn.'s new investor relations website is making its debut in tandem with the competitive sale of $43 million of general obligation and revenue-backed green bonds set for Wednesday.

In a couple of different measures, the municipal bond market looks like a deep and diverse capital market. Bonds outstanding total close to $4 trillion. In 2016, nearly $1.8 billion in bonds were issued on average for every day the markets were open over the course of the record-breaking year. But in other, less obvious ways, the market can seem small for issuers at times. How? There are a small handful of very important bond investors that dominate the primary market, determining the prices/yields that issuers will pay for capital over the life of their borrowings. These include big mutual funds and insurance companies.For large issuers, these investors are absolutely critical and they play an important role in the market. But with plans for a new, $1 trillion federal push for enhanced infrastructure investment, there’s a big opportunity for large issuers to tap new, deep-pocketed investors to raise additional capital for future projects: foreign investors.Last month, the Wall Street Journal ran an interesting story about the head of Japan's Government Pension Investment Fund expressing interest in investing in U.S. infrastructure. One way they could do this is to invest directly in a cash-flowing entity like a port or transit authority, buying the entity or becoming an equity investor. But another way – one that offers more liquidity - is to purchase the bonds of an issuer. Some of the largest issuers in the muni bond market in 2016 were these types of issuers, including the New York MTA, the Pennsylvania Turnpike, the La Guardia Gateway Partners, Chicago O’Hare International Airport and San Francisco International Airport.The Government Pension Investment Fund is one example of a new foreign investor, and a big one at that: they have $1.2 trillion to invest. I think they would be very interested in taxable municipal bonds of certain large issuers like the ones mentioned above. That could be a distinct possibility if a 2.0 version of the Build America Bonds program was developed by the incoming administration and Congress as part of an enhanced infrastructure program.As an issuer, the opportunity to diversify your investor base and/or diversify your capital structure is one that can’t be ignored. Diversification offers long-term benefits to issuers and their constituents, as many large traditional municipal investors can be full or nearly-full on a given issuer’s bonds. This is particularly true for large and frequent muni issuers.But foreign investors will only deploy their capital with issuers who are transparent and easy to find online like a large corporation would be. If you’re a large issuer in the muni market, it’s time to do a self-assessment to ask yourself if you’re ready for new taxable investors that have certain expectations about disclosure and transparency. I think it requires three things: first, access to and direct participation in bond financings by top issuer officials like governors, mayors, treasurers, and executive directors; second, direct communication with investors through regular, live investor conference calls; and third, a dedicated investor relations website to make it very easy for these new investors to understand a credit and have confidence in the ability to efficiently do due diligence in future years. In other words, present yourself like a corporate issuer would present themselves to investors. If you want access to taxable capital, meet the expectations of taxable investors.One final thought: this is the same opportunity that presented itself in 2009 when the initial Build America Bonds program was authorized under the federal stimulus act. In terms of accessing foreign investment under this program then, unfortunately it was a swing-and-miss for most issuers for a variety of reasons. That could change with a second generation BABs program, but it will be up to issuers to make it happen.

 According to statistics, about 45% of Americans set New Year’s resolutions each year. Perennially, the top goal is to lose weight.Unfortunately, only 8% report that they achieve their goal to drop the pounds. How about setting a more realistic New Year’s resolution this year? Instead of dropping weight, set a goal to drop the yields in your next bond sale.The way to do this is pretty straight-forward: make it easy for bond investors to find you as an issuer and to find your most recent interim financial data. Essentially, it requires a change in mindset towards disclosure and investor outreach. If you can view investor relations as a tool and not as a chore, the benefits could be long-lasting for your organization.Replace the old, so-2016 way of thinking...with the new, 2017 way of thinking. For example:2016 Thinking: Bond investors don’t care about current data...2017 Thinking: Yes they do! Investors care more about where an issuer is going (an operating budget) than where an issuer has been (an audit)2016 Thinking: If I do the bare minimum disclosure as an issuer, I’ll be fine when I issue bonds...2017 Thinking: Maybe that's true from a strictly compliance perspective. But if your data is not reliably easy to find, investors may charge an uncertainty premium to your next bond sale that may cost thousands or hundreds of thousands of dollars2016 Thinking: Investors only care about bond ratings...2017 Thinking: No, most of the big investors who largely determine a bond's pricing in the primary market undertake their own internal credit process. Ratings matter, but to a lesser degree than they did 10 years ago. Data matters - and current data matters a lot2016 Thinking: I’ll let my advisor or banker handle investor outreach...2017 Thinking: Issuers shouldn't delegate such an important and potentially costly aspect of a bond pricing. It's up to the issuer to look for ways to distinguish their bond programs from others2016 Thinking: The markets are very favorable to issuers, and access to low-cost capital is easy...2017 Thinking: The market has changed - or at the very least, is in the process of changing - to one that is much less favorable to issuers. Bond funds are experiencing sharp redemptions, insurance companies may curtail their buying until they have a clearer picture of their future tax rates. Tax rates may make muni's less desirable overall...all of this adds up to a market environment in which bond investors will be very selective going forward2016 Thinking:Investor relations is a cost...2017 Thinking: Investor relations is an investment, not a cost, and one that may provide a very healthy return over the long run to issuers and their constituents. Just look to the corporate bond market as evidence of its value: corporations view IR as an essential tool of their financing programs2016 Thinking: Investor outreach is costly and time consuming...2017 Thinking: Not with BondLink's investor platform. BondLink is affordable and very easy to use. An issuer can update their "profile" by sharing a new document or data point with investors in a matter of seconds2016 Thinking: There are no tools to help with my disclosure/investor relations...2017 Thinking: BondLink is the only company providing investor platforms for municipal issuersWe hope you can achieve all of your New Year's resolutions in 2017. But when it comes to your debt financing program, aim high and take steps to distinguish your bond program by making it easy for investors to buy your bonds! 

Since November, the environment for municipal bond issuers has become really difficult. From a market perspective, the sharp cash outflows and redemptions experienced by bond funds coupled with the tax-code uncertainty for insurance companies has led to a significant weakening of rates (higher yields). Yesterday’s decision by the FMOC to raise the fed funds rate will pressure the yield curve to move even higher. Additionally, on the regulatory front, outgoing SEC chair Mary Jo White renewed calls for the SEC to establish disclosure standards for issuers. And a member of Congress has drafted a bill that would completely upend the current muni market disclosure regime by requiring the SEC to determine disclosure standards, establishing pre-sale registration requirements of certain types of bond sales, and shifting the burden of disclosure to issuers from underwriters.Yikes – talk about a bad month.The bright spot for issuers amidst these developments is the renewed focus on rebuilding the nation’s infrastructure. Both presidential candidates promised a focus on infrastructure investment; President-elect Donald Trump specifically mentioned it in his election-night victory speech. Since then, there have been nearly daily articles in the Wall Street Journal and the New York Times on how this could be accomplished, which all muni bond market participants would agree is a very healthy thing. Nathaniel Popper of the New York Times broke down the infrastructure needs in a particularly good article, while his colleague James Stewart wrote a column encouraging Trump to build something inspiring. I highly recommend both to muni market participants.For municipal issuers, this is a long over-due conversation. As the details of the new infrastructure investment plan begin to get fleshed out, it’s imperative that issuers – via their trade associations like the GFOA, NAST, and others – have a hand in developing the program because of the risks inherent in other policy proposals whether tied directly to the infrastructure investment idea or not.For example, another stated objective of the new administration is an overhaul of the tax code. Any reduction in the rate on personal income taxes will have a direct impact on the value of municipal bonds because most end up being held as tax-exempt investments by individual investors. A lower tax rate will reduce the demand for municipal bonds and result in higher yields born by issuers and ultimately taxpayers. While a lower tax burden may in fact be good for the overall growth of the economy and the country – something that we’re not debating here - a major overhaul of the tax code could include a narrowing of the tax-exemption or elimination of the benefit/subsidy all together. The former is something that has been proposed for the last few years by the current administration.A federal infrastructure bank has been mentioned as a possible idea to address the need to repair thousands of roads, bridges, tunnels and rails. But without additional funding to accompany such a new program, an infrastructure bank would just be a different mechanism to fund the same number and scale of projects. Essentially, this would only shift the identification of infrastructure investments from local officials to federal officials and not enable the funding of more projects. In other words, Congress gets to pick mega projects instead of states and cities.Finally, there also seems to be an emphasis on setting up an infrastructure program using tax credits to attract private investors like domestic and international pension funds, sovereign wealth funds, infrastructure consortiums, private equity firms, etc. On the surface, the idea of deepening the pool of investors willing to invest in the repair of the nation’s public infrastructure is a very good thing. But at what cost?Most of these private sector investors seek returns of 8%, 9% or more. This begs the question: why would we build a school or a bridge at a cost of 8% or 12% by partnering with a private wealth fund when that same school or bridge could be funded through the municipal bond market at 4% or 5%? Municipal bonds offer the cheapest way to finance the new infrastructure that the U.S. needs. It therefore makes sense to promote policies that support the growth and development of the muni bond market.As the infrastructure program begins to take shape, policymakers should work with issuers to identify the tools needed to make the municipal market more efficient to support the scale of investment that is being targeted. This might include enhancements to the tax code under which municipals are currently issued, like the ability to advance refund a bond more than once; or new programs to attract more low-cost investors, like a 2.0 version of the Build America Bond Program; or additional sources of funding, like enhanced revenues from the federal gasoline tax which are used to fund local transportation projects across the country.For more to chew on, check out my prior blog on a targeted plan to rebuild bridges across the country.

This Fall the municipal bond market has experienced a number of developments and emerging issues  that may likely impact issuers in a very big way. We’ll get to some of the longer-term developments in subsequent posts, but the most important short-term development for bond issuers is the change in the yield-to-maturity curve and a completely new market environment.Since the November presidential elections, a resulting rally in the stock market has contributed to an acute and violent sell-off in bonds. As is often the case, the sell-off in municipal bonds has exceeded that of Treasuries. Despite a stronger market this week in which bids seemed to stabilize, long-term rates were off (higher yields) by more than 80 basis points from November 8th to December 1st. What’s that mean to issuers? If the total volume in the bond market is between $350 billion and $400 billion, each basis point is worth between $350 million and $400 million in terms of higher interest costs for issuers (using some basic assumptions about yields and average life). Credit spreads are generally wider by 10-12 basis points today as well, and the slope of the curve has steepened by more than 50 basis points. According to Bloomberg, municipal bond funds experienced more than $5 billion in redemptions in the month of November. These redemptions, and the expectation for more going forward, will be priced in by big investors, which will continue to pressure rates for issuers selling bonds in 2017.The key take-away for issuers is that the long-anticipated movement to higher rates is finally occurring. Most issuers have enjoyed access to very low-cost capital for a sustained period of time, with low rates and compressed credit spreads. That market may be now replaced with a more expensive bond market, a market in which investors have less cash and will be more selective when it comes to credit and bond structures. It’s incumbent on issuers, therefore, to adjust to the new normal.This new market dynamic will require issuers to be much more proactive with their bond investors in two ways: first, issuers should have active dialogues with investors about their preferred bond structures in a rising interest rate environment. The ubiquitous 5% non-call 10 structure may fall out of favor. In fact, investors may prefer to invest on the shorter end of the curve and/or may prefer variable rate structures. Second, the delta in the pricing of new-issue bonds between issuers who are transparent and make their data easily accessible to bond investors, and those that don’t, will grow dramatically.For more information on the BondLink investor platform, please request a demo here.

While not as prevalent as issuers in the corporate bond/equity markets, municipal bond issuers are devoting more and more resources to the development of dedicated investor relations (IR) websites to connect and communicate directly with bond investors. These platforms allow issuers to provide more information to investors about who they are and what they do, including public documents and data, and make a social connection between the bonds and the capital projects that are being bond-financed. They can also provide a boost to the compliance aspect of issuer disclosure from a regulatory perspective. In response to the growing trend of municipal IR websites, last year the Government Finance Officers of America approved a best practice for its members called “Using Technology for Disclosure” that encourages issuers to use dedicated IR websites to communicate with the municipal bond market.The purpose of IR websites is to attract more investors to the issuer’s bonds. Better disclosure can lower the yields on bonds, lead to more stable bond valuations, and result in more trading activity and liquidity in the secondary market. The idea is to make it as easy as possible for investors to find out more information about the bonds. But in order for an issuer to provide productivity gains to investors, the IR website has to be designed in a way to meet the changing  credit surveillance behavior of investors. Not only should an IR website be visually engaging and easy to navigate, but the platform should be flexible enough so that investors can access key documents, presentations, the finance calendar, etc. using any type of device. It may not seem obvious, but many investors do their investing research using devices other than desktop computers. According to a study by Rivel Research, 67% of corporate investors surveyed accessed corporate IR websites via tablets. 63% said they regularly accessed sites using phones. In terms of the types of devices used, Apple tablets and phones were the most popular of the investors surveyed.The need for IR websites to provide investors with access to data on all types of devices is probably even greater just based on the fact that much of the outstanding municipal bonds are held by individual investors. Federal Reserve data regularly show that roughly 70% of municipal securities are held by individuals either directly or through mutual funds.Responsive web design refers to websites that "respond" to the device on which they are being accessed. In short, as an issuer you want an investor’s experience – including its access to documents, data and other tools – to be just as useful whether they are an institutional investor accessing your website from their desktop terminal or a private wealth advisor accessing your website while presenting to his/her clients. With fully responsive web design, an IR website’s content is optimized and is as easily available via a large screen like a desktop computer or a small screen on an iPhone.Try it out for yourself. On your phone or tablet, visit a fully responsive corporate site like the Microsoft investor relations website (https://www.microsoft.com/en-us/investor). You will notice that the company is still able to provide a wealth of content to investors no matter the size of the screen of the device accessing the site. Documents, stock quotes, and financials are all visible and accessible when using a phone.The key take-way for municipal issuers: mobile matters. It is a certainty that existing and potential investors are researching issuers and conducting credit surveillance via mobile devices. If your goal is to be a leader in disclosure in order to attract as many investors as possible to the next bond sale, build in the necessary flexibility to your IR website. Don’t ignore the huge pool of investors – many of whom may be individual investors – who shop for bonds like they shop for new cars or houses. When there is so much competition for low-cost capital in the municipal market, you can’t afford to have an IR website that does not offer tools to investors across all devices.In our next post, we’ll talk about how IR websites democratize data in the municipal bond market.

On behalf of the entire BondLink team, I’m proud to announce our product launch as of Monday, May 23rd.When we began building in 2015, we set this date as our target to go live because it coincides with the start of the 2016 Annual Government Finance Officers of America (GFOA) conference. The GFOA is made up of more than 18,000 dedicated government finance professionals from all different types and sizes of issuer organizations, and its our mission to provide tools to help them reduce their borrowing costs when they issue municipal bonds.As any startup can attest, it’s a lot of work to get off the ground and then deliver a product to market. I’d like to thank our investors, who have seeded us financially but have also encouraged us at every possible turn. And I’d also like to thank the states, cities, public authorities and non-profits that have beta tested for us all spring.Over the past few years, market regulators have grown increasingly concerned with the efficiency of the municipal market, specifically calling out its market structure and disclosure weaknesses. Their fear is that investors in the municipal bond market aren’t accorded the same levels of data and price transparency as they are in other markets. As a company, that’s where we’ve focused our energy. We want to provide the market solution that regulators are looking for and help move the municipal bond market forward. There are a number of technology companies that provide services to market participants in the municipal bond market. But we’re a little different: we’re built exclusively for issuers. We know from first-hand experience how difficult it is to be a public sector CFO or treasurer. And we’re driven to help governments issue bonds at lower costs so that public funds can be used for other critical needs like education, health care and public safety.We look forward to meeting and working with new clients, as well as continuing to serve our existing clients.

former Massachusetts assistant treasurer, on Monday launched BondLink, a tech company he co-founded to help municipal issuers manage debt management programs.

This week is infrastructure week, seven days in which 150 different organizations ranging from the U.S. Chamber of Commerce to the National League of Cities put together events to educate taxpayers and policymakers on the benefits of addressing the nation’s public infrastructure.  As the organizers put it, “infrastructure really matters”. Infrastructure touches all aspects of our daily lives, from public safety to quality of life to commerce and economic development. Just in the past few months we’ve been reminded of its importance, with the water crisis in Flint, Michigan and the problems with the Washington, DC Metro.Despite its critical importance, the state of the nation’s infrastructure is not in good repair. The American Society of Civil Engineers (ASCE) recently released a report that estimated the gap between funding and infrastructure spending needs in the country stands at $1.44 trillion, a deficit that will grow to over $5 trillion by 2040 without additional funds. According to ASCE, the U.S. will sacrifice 2.5 million jobs and $4 trillion in gross domestic product over the next 10 years if it can’t address its infrastructure needs. That economic drag translates into a cost of about $3,400 to each American family.Surface transportation has the greatest disparity between funding and needs, and arguably the most pressing in this category is the repair of bridges. The U.S. Department of Transportation regularly provides an inventory of the roughly 610,000 bridges across the country, and about 10% are currently deemed “structurally deficient”. Think about that for a minute: one in ten bridges that drivers rely upon to cross waterways, canyons and other roadways are rated deficient. Bridges are considered structurally deficient when they have significant deterioration of the bridge deck, supports or other major components of the bridge. This designation doesn’t necessarily mean that they pose an immediate safety hazard, but the bridge’s defects are significant enough that it may limit its ability to bear weight. The American Road & Transportation Builders Association estimates that at the current pace of investment it would take at least 21 years to replace or upgrade all structurally deficient bridges nationwide. We have to do a lot better than this.One idea for infrastructure week is to have federal and state policymakers focus on a single type of infrastructure to be addressed quickly. If I was in charge, I would focus on bridges by creating a national accelerated bridge repair program. Bridges are a good candidate for an accelerated construction program because early investments to maintain their repair can cost-effectively extend their useful lives, not to mention the obvious safety benefit to the driving public.If the repair of bridges became a priority of policymakers, what would be needed? First, I would use existing funding channels for such a program and not try to reinvent the wheel with new ideas like a national infrastructure bank. Of all the public infrastructure in the country, about 75% of it is built by state and local governments, with a large majority of funding for the projects coming from the municipal bond market. Second, policymakers could provide additional tools to local governments that are utilizing the municipal bond market to sell bridge bonds, like authorizing a limited, new version of the taxable Build America Bond program to be used specifically for a national bridge repair program. The original Build America Bond program was part of the 2009 federal stimulus. The benefit to issuers of these types of bonds is the ability to sell to taxable investors, expanding issuers’ available pool of capital beyond the traditional tax-exempt investor. Third, policymakers could consider additional revenues, like indexing federal and local gasoline taxes to inflation. Revenues from the federal gas tax, which haven’t been raised in more than two decades, flow back to states through the Federal Highway Trust Fund, another existing funding channel that has worked extremely well providing infrastructure funding since the 1950’s.Massachusetts launched an accelerated bridge repair program in 2008, dedicating user fees and taxes generated by motor vehicles, as well as funds from its share of the Federal Highway Trust Fund, to finance the massive program. The program won awards for its financing and construction innovation, and succeeded in reducing the state’s inventory of structurally deficient bridges by an estimated 25%. Now would be a perfect time to take a program like this nationally, with interest rates low, the price of gas relatively low, and a big slump in commodities globally.Here's a link to an interactive map of all of the bridges in the country, courtesy of The Atlantic's City Lab:http://tinyurl.com/z3zl39rCheck out how many structurally deficient bridges are in your neighborhood!

Last week, the National Federation of Municipal Analysts held their annual meeting in Chicago. So it seems to me like a good time to discuss ways that municipal bond issuers can develop stronger relationships with their existing bondholders, while also attracting new investors in order to diversify their investor base. A common tool from corporate investor relations practices that could be replicated in the municipal bond market is to host an investor meeting every year.Corporations are generally required to hold an annual or regular shareholder meeting under most state laws. A lot of companies, particularly the larger, higher profile ones, turn these events into an important aspect of their investor relations programs. An annual investor day is seen as an opportunity to allow company executives to connect directly with small and large shareholders, as well as buy-side analysts who may cover the company and the financial press. The strategy is to enhance the company’s brand with investors, and the focus is to ability to access low-cost capital over the long-term. In the municipal bond market, however, annual investor conferences are rare even though some large issuers like states have as many bondholders or bonds outstanding as major corporations. That’s a big missed opportunity to develop relationships with investors, showcase the issuer’s financial management team, and provide context to the issuer’s capital budget and future infrastructure needs.Probably the most widely covered annual investor event in the U.S. is the one hosted by Warren Buffet’s Berkshire Hathaway. Berkshire has been hosting an annual investor event for the last 50 years. This year’s event saw 40,000 shareholders attend and was held in Omaha’s convention center. It was even live-streamed on Yahoo Finance. In February, Jamie Dimon hosted JP Morgan’s investors and analysts at its annual “Investor Day”. Not only does the CEO present at these events, but he regularly participates in a Q&A session with attendees. The same is true for a number of other CEO’s and CFO’s across many industries in the corporate world.Annual investor conferences are far less common in the municipal bond market. Only a few states and a handful of cities now host annual investor events. For example, in my time with the Commonwealth of Massachusetts, we started hosting investor conferences in 2011 that regularly drew more than 200 investors and other market participants to Boston each year. The Commonwealth – which has more bonds outstanding than computer chip maker Intel - just had its fifth consecutive investor conference in December. And at each of these events the state’s governor and treasurer participate and meet with investors. New Jersey is another state whose state-level issuers come together to present to investors at an annual event each year. On the municipal side, the city of Chicago has been hosting investors annually since 2012. Chicago’s conferences include tours of the city’s different infrastructure priorities. New York City and its various financing agencies do the same. This past fall, Washington, DC held its first event. And the city of Houston hosted its fourth annual event a few weeks ago.From my experience as an issuer and member of a few different issuer trade associations, I know there are a couple of challenges that tend to make it difficult for municipal issuers to not invest in direct investor outreach like annual conferences. First is the time and resources involved: it takes a lot of work to put on a conference. There’s also an upfront cost of hosting the event. Although growing investor relationships can provide significant benefits to an issuer over the long-term, the initial outlay of hosting an investor day can give issuers pause. Second, there’s not a lot of industry practice around engaging investors outside of a bond sale. The more typical practice is for issuers to conduct investor conference calls or even go visit a few investors in their offices, but these are mostly associated with a specific bond financing. And third, interest rates have been low for a long time now. Since the Great Recession, a lot of issuers have sold their bonds at excellent levels and don’t see the need for direct outreach to investors.There’s definitely some validity to these points, but I still think that the long-term benefits of a proactive investor relations program to issuers and their taxpayers are true great to ignore. On the cost side, there are ways to minimize the use of public dollars while also engaging investors. For example, muni issuers can take a page out of the playbook of corporations that are now hosting virtual annual investor conferences. In 2015, HP hosted its shareholder meeting entirely online for the first time. A virtual conference also addresses the challenge of getting investors to attend and/or participate in an event for an issuer that is not located in a large financial center like New York or Chicago or San Francisco. And as I mentioned above, the more conventional practice of issuer-investor meetings is for issuers to conduct mini road shows and meet with investors in their offices right before a bond financing. These have limited value over the long-term. Investors will appreciate the opportunity to meet with an issuer and hear their pitch, but they know the issuer’s there only to sell bonds at the next sale – not primarily to grow the relationship. Giving investors access to the decision-makers of a state or a city or a non-profit on a regular basis is much more meaningful, and should be part of the IR program of large and frequent muni issuers. Importantly, it gives the issuer the opportunity to receive feedback from investors on credit issues, bond structures, etc.Does an issuer see a return on their investment in hosting an annual investor conference? I think the answer is ‘yes’, and for evidence I would look no further than the practices of very successful organizations like Berkshire Hathaway who have made investor conferences a centerpiece of its investor relations strategy. Is this just for large issuers? No, smaller issuers in the same region or industry could join together to jointly host investors on a regular basis. I think the return to all issuers for developing relationships with investors - through investor conferences, or providing more timely continuing disclosures, or utilizing a dedicated investor website - only gets bigger over time, especially when the interest rate curve normalizes to higher rates and wider spreads, when every single basis point counts more.But the key to maintaining access to low-cost capital, diversifying the investor base, and reducing the volatility around a bond’s valuation is to grow investor relations through long-term, proactive investment in the needs of investors. This may not produce an immediate return at the next bond sale, and issuers should not expect it to. Since governments and non-profits will almost always need investor capital to fund their infrastructure needs going forward, issuers should focus on a longer horizon. What are the first steps? Develop a five-year investor relations strategy that includes multiple tools that provide investors with what they need to evaluate your bonds more efficiently. When you do that, and provide them with productivity gains, those gains will flow back to you as the issuer. 

In my last post, I discussed the presence of Alternative Trading Systems (or ATSs) in the municipal bond market that handle the majority of trades in the secondary market. More ATSs are active today in the muni market, which is a good thing for investors because of the liquidity that they can provide. For large and frequent muni issuers, however, I think there are big opportunities to take advantage of the efficiencies and networks of electronic trading systems in the primary market, where new-issue bonds are priced and sold.The benefits of using electronic trading platforms for debt financings fall into three buckets: better pricing, less market risk, and better investor distribution. To walk through these benefits, let’s consider how a large issuer in the muni market typically issues bonds. Large issuers like states – who may have as many bonds outstanding as a major corporation - will come to market once or twice a year and sell hundreds of millions of dollars in bonds over the course of one or two days. With a large amount of bonds being offered over such a short period, there’s a good chance that the natural investor demand in the market for a single issuer’s bonds on a single day does not perfectly match the supply of bonds being offered. When the supply of bonds exceeds the real investor demand on the day of pricing, the issuer has to sell its bonds at higher yields just to get all of the bonds sold and clear the market to complete the financing. In a lot of cases a relative value buyer is the investor who buys the bonds at the higher yields, who will then re-sell the bonds to retail investors over time at different yields than the levels at which they were originally purchased from the issuer. While for the issuer the bond pricing is complete and the funds are raised, the bonds are likely fixed at higher yields that the issuer and its taxpayers must live with over the life of the bonds. That’s not an efficient pricing process for the retail investors who end up with the bonds, and its certainly not ideal for the issuer.With an electronic trading system, an issuer has the opportunity to offer bonds to investors very efficiently over the course of multiple days, not just a single day. A longer offering period could be structured like a rolling offering, or a shelf registration, that is commonly used in the taxable bond market by large corporate issuers in order to attract new investors to the muni market. Offering bonds over an extended period promotes better pricing for the issuer and its taxpayers because the market’s natural investor demand is not being overwhelmed by the supply of bonds being offered on a single day. Instead, bonds can be offered to investors via an electronic platform over multiple days, a selling process that allows each day’s natural investor demand for bonds to determine the supply of bonds that are actually sold. In effect, the issuer plumbs the market on a daily basis to gauge the investor demand for bonds. The issuer has better control of the pricing process, and can cut out the middle man – the relative value buyer - and instead offer bonds directly to retail investors if that’s the goal. This is better for both issuers and investors.Market risk is another large risk that all issuers face but is difficult to hedge if the bond pricing is being executed on a single day, as it is for the typical bond sale. The risk is that on the single day that an issuer chooses to come to market, the volume of bonds being offered market-wide in the primary or secondary market overwhelms investor demand. Market risk from the secondary market is even more difficult to manage for issuers because bonds are put out for the bid by existing holders on an unscheduled basis, which could compete with the bonds being offered in the primary market. Other factors like domestic or international economic news or events can impact the U.S. Treasury market which, in turn, impacts investor demand in the muni market. A longer offering period, however, reduces the market risk that the issuer experiences, as it is effectively dollar-cost-averaging the bonds into the market by selling over multiple days or weeks. This can be done in a standard bond sale too, but it's a lot more efficient and transparent for the issuer and investors if the sale is being managed via an electronic trading platform.The final opportunity of using an electronic trading platform – which probably provides the biggest benefit to an issuer’s debt program over the long-term – is the ability to diversify the investor base, including the ability to connect with more retail investors. The primary market for muni bonds is really dominated by 10 or 20 very large institutional investors. These include investors with large, state-specific mutual funds. These investors are very important to issuers as they provide a lot of liquidity to the market every single day. At any point in time, though, they may have strong demand for an issuer’s bonds or they may not for various reasons, like negative fund flows, credit concerns, or the portfolio may be full on an issuer’s bonds. When their demand is weaker, the issuer’s pricing is going to suffer. Using an ATS to sell bonds can augment an issuer’s investor base to include firms that don’t typically participate in the primary market for municipal bonds. Who are these other firms that an issuer may be able to access using an open-architecture trading platform? UBS is a good example, with 7,000 brokers it is one of the biggest wealth management firms in the U.S.; LPL Financial has 14,000 brokers while Pershing has six million active accounts in the US; Ameriprise is a good candidate because it has approximately 10,000 brokers; Commonwealth Financial Network is another good example, with its $100 billion in client assets.I witnessed first-hand the benefits of an electronic trading platform when I was in charge of the MassDirect Notes program. We offered bonds to individual investors using the trading platform TMC Bonds, and made sure the platform offered bonds to any firm representing retail investors in the country that might be interested. Our primary goal was to widen the state’s investor base because we knew better distribution would translate into better pricing, and that’s what we achieved. We were able to sell bonds to 44 different first, including those listed above, at better prices and yields than we had before, and it was a very efficient process because it was done using a trading platform.It’s important to note that selling bonds through an alternative process like this is not for every issuer. I think it works best for large issuers with frequent borrowing needs, who can augment a traditional bond sale with one using an electronic platform to reach new investors. However, all issuers should be exploring how technology in the bond market can be used to improve their financing results and elevate their debt management programs.In proceeding posts I will follow up on two points that we didn’t have time to cover today: first, the disclosure requirements that go along with selling bonds using an electronic trading platform. For the MassDirect Notes program, we adopted a regular schedule of disclosure releases and used our dedicated investor website to enhance our disclosure to the market. And second, the really big benefits that electronic trading platforms provide to retail investors. 

According to the MSRB fact book, there were nearly 37,000 trades made in 2015 in the municipal bond market involving over 13,000 unique securities. Many of those trades were handled through electronic trading platforms, also known as Alternative Trading Systems (ATSs), like TMC Bonds and TradeWeb. In 2016, new entrants to the muni ATS market will inject even more technology emphasis on electronic trading. Last month, MarketAxess announced it was expanding its business to include the $3.6 trillion municipal bond market. And the owner of the New York Stock Exchange, Intercontinental Exchange, recently purchased two bond evaluation services used by investors that may lay the groundwork for yet another electronic trading platform.This infusion of technology by well-capitalized and established exchanges are a very good thing for the bond market, which has been criticized by the SEC as being opaque and inefficient when compared to other capital markets. More electronic trading should improve trading execution, reduce fees, and enhance pricing transparency. This all contributes to greater liquidity for investors, which should help attract additional capital to the market. A more efficient and liquid secondary market is also a very good thing for municipal issuers.What all of these platforms currently have in common is that they are set up to handle the municipal bond market’s secondary market trading. However, municipal issuers should also think of the opportunities that electronic trading may hold for them in the primary market, where their bonds are initially sold to a dealer and then reoffered to the public. It’s in the primary market where an issuer selling fixed-rate bonds locks in bond prices/yields for the issuer and its taxpayers over the life of the bonds. There are opportunities for large, frequent issuers to benefit from electronic platforms, benefits that overcompensate for the time and resources it takes to issue bonds through such an alternative method. This is particularly true for issuers seeking to attract additional retail investors.Bond issuers in other markets certainly take advantage of technology to raise capital and distribute bonds more efficiently. For example, the US government sells bonds electronically to retail investors through its TreasuryDirect program. And there are a number of blue-chip companies that issue bonds to retail investors through electronic trading platforms like InCapital. InCapital has been incredibly successful selling corporate bonds through its platform. Last year it announced that it had crossed the $350 billion threshold in terms of new-issue bonds sold to retail investors.So if issuers in other markets have had success using electronic trading platforms to sell bonds to a wider network of investors, why can’t they also be used in the municipal market? The answer, of course, is that they can be used by certain issuers. Large and frequent issuers – like states, big cities or counties, universities or hospital systems, or public utilities – could sell bonds more efficiently through electronic trading platforms and benefit from their enormous distribution channels.In March 2014, the Commonwealth of Massachusetts launched MassDirect Notes, a first-of-its-kind program in which bonds were offered to retail investors through the open-architecture platform of TMC Bonds. Over the program’s 9 weeks of selling, the Commonwealth sold about $6 million in bonds per day to retail investors. Over 1,000 individuals orders for MassDirect Notes were placed from 44 different firms, with the average order size being under $250,000. And the bonds were sold at spreads that were tighter than where the state had sold similar bonds in the past.The decision to develop and launch the MassDirect Notes program – which ended up being named The Bond Buyer’s National Deal of the Year – was rooted in the state’s desire to harness innovation in order to benefit its taxpayers in both the short-term and long-term. I think there are opportunities for more issuers in the municipal bond market to realize significant savings – or avoided interest costs - by using electronic trading systems to sell bonds. The potential benefits fall into three buckets: better pricing, less market risk, and better investor distribution.I’ll go into detail on each of these potential benefits in my next post.

Happy Earth Day 2016! Given the occasion, I think its only appropriate to discuss Green Bonds in the municipal bond market.What are Green Bonds? Although there may be different definitions of what constitutes Green Bonds, generally speaking, these are bonds that have been issued to fund environmentally beneficial projects. Typically, the security and structure of the bonds are not tied to the environmental projects being funded. Most Green Bonds come in standard maturities, have CUSIPS or other standard designations, and generally look and act like regular, “non-Green” bonds, including bond ratings.There’s no single set of standards for what constitutes a Green Bond, or the types of projects that are eligible to be funded by these bonds. It really comes down to what an issuer needs to finance and what investors believe is an environmentally beneficial project and are willing to finance. Projects that have been funded thus far include those that seek to address climate change, public transportation improvements like rail expansion, preservation of open space or brownfield remediation, drinking water projects, habitat restoration, renewable energy projects like solar or wind, etc.Green Bonds have been around since 2008, when the World Bank – led by the efforts of Heike Reichelt – started issuing the bonds to fund projects around the globe that fight climate change. According to their website, since 2008 the World Bank has issued approximately $8.7 billion in Green Bonds in more than 115 transactions in 18 different currencies.While the World Bank is clearly the leader in issuing these types of bonds, corporations and local governments in the U.S. have also issued them to fund a wide variety of green projects. For example, in 2012 Warren Buffet’s Berkshire Hathaway issued more than $1 billion in Green Bonds to fund a solar farm in California. Another major U.S. corporation, Apple, issued $1.5 billion in Green Bonds earlier this year. Globally, some $42 billion in Green Bonds were sold in 2015, up 13% from the amount issued the year before according to the Climate Bonds Initiative.How about in the municipal market? Green Bond issuance continues to grow. The first Green Bonds in the muni bond market – a $100 million financing – were issued by the Commonwealth of Massachusetts in 2013. Given the financing's success with both institutional and individual investors, the state followed up with a much larger, $350 million Green Bond sale in 2014. According to Bloomberg data, a total of $3.8 billion in Green Bonds were issued in 2015 in the municipal market. That’s a big jump over 2014, but still a relatively small percent of the overall amount of bonds issued in the market in 2015. Nonetheless, the list of issuers of Green Bonds is impressively diverse, both geographically but also by size of issuer and purpose: state issuers include California, Connecticut, Hawaii, Massachusetts, Vermont, and Washington; cities include Washington D.C. and Asheville, NC; higher-ed facilities include the University of Texas and the University of Cincinnati; public housing agencies like New York City Housing have issued Green Bonds; and transit authorities include the New York MTA have also issued these bonds to interested investors.At this point, however, its not clear in which direction the market for municipal Green Bond goes. Since 2014, there’s been a wave of muni issuers essentially testing investor appetite for these types of securities. And a market for third-party certification of “green bond standards” in the muni market is now starting to grow, with entities like Vigeo and the Climate Bonds Initiative now providing assurances to investors. Even Moody’s is exploring some sort of green bond rating system.The emergence of firms that provide a third-party “green” certification is a positive development for the Green Bond muni market. It’s a small but important step towards a measure of standardization, which should broader their appeal to more investors. For the Green Bond market to really grow, it will be important for issuers to work from a more consistent playbook in terms of how these bonds are issued and how bond proceeds are spent. What would Green Bond investors like to see? Things like a common and transparent approach to project selection and criteria; common definitions for what constitutes a Green Bond; common measurement of environmental impacts; and consistent post-issuance reporting requirements. For this to happen, it takes leadership from market leaders to bring issuers and investors together to hammer these things out. We’re already seeing it from a major issuer – California State Treasurer John Chiang. He's recently stated that he’s interested in growing the California Green Bond market. But before moving forward, he’s undertaking his own due diligence first. He’s been out traveling to a number of cities to hear directly from bond investors.Green Bonds do have their critics and the criticism goes as follows: “All municipal bonds are 'green' already because they provide some sort of public purpose, therefore Green Bonds is a marketing ploy”; “Issuers are not seeing an immediate pricing benefit from Green Bonds so they’re not worth the effort”; and, “Green Bonds are being used to fund projects that would have been funded anyway.”Let’s take these one at a time. First, not all municipal bonds are issued to help the environment in some way. A big chunk of bonds issued every year in the market are refunding bonds, whose only purpose is to refinance securities that are already outstanding. And not every new-issue bond serves an environmentally beneficial purpose: bonds are routinely issued for road construction or, less frequently, for things like sports stadiums. Next, calling bonds “Green” is a marketing strategy – but marketing shouldn’t be taken as a pejorative thing. Issuers are trying to connect with investors who want to know that their investments are funding environmentally beneficial projects. There are a host of investors, both in the muni market and in the taxable bond markets, who want to invest in these projects. Firms like Blackrock and State Street have dedicated Green Bond funds. Trillium and Community Capital have been investing in these types of projects for decades. What’s wrong with a muni issuer trying to diversify its investor base by attracting capital from these different investors? If an issuer does have success finding new investors for its bonds, it will be a benefit to the issuer's taxpayers over the long-term.The final charge, that Green Bonds are funding projects that would be funded anyway, is probably accurate. But, to be fair, its also a little too early to make that call conclusively. Up to this point, issuers have been testing the market and gauging interest from investors. If the investor community responds with strong demand for additional Green Bonds, that signal should give issuers the incentive to authorize more environmentally beneficial capital projects. That’s how a market for any product should develop.I think it’s a very positive thing for the bond market to innovate and to move forward, even if it’s a small step. Green Bonds give investors yet another reason to choose to invest in a city or town’s capital projects. But for the market for Green Bonds to really expand from here, and to start providing issuers and taxpayers a clear benefit, its important for issuers to collaborate so that there’s more consistency and transparency on how these bonds are sold, how bond proceeds are spent, and how environmental benefits are measured.

Welcome to The Fisc.The Fisc is a blog where Colin MacNaught, co-founder of BondLink, will share thoughts and ideas on topics that are important to municipal bond issuers. The goal of these posts is to not only inform, but to have a dedicated space where different issuers and market participants can share ideas about debt management from across the muni market. The Fisc will be updated as often as possible, and the topics covered will range from current market events impacting how issuers finance projects to long-term treasury management strategies. Like BondLink’s software products, we hope The Fisc provide issuers with tremendous value.BondLink is a financial technology company building products to help move the municipal bond market forward. Please visit our website, www.bondlink.com, to sign-up to be notified as we roll out our products for municipal issuers.