Issuers face worst environment in 50 years



Panelists at this year’s Association of Government Finance Officers MiniMuni Conference said issuers are facing the worst bond issuance environment in 50 years, and the response is understanding voluntary disclosure by state and local governments. Said above is essential.

“Unfortunately, this is the most difficult market for treasurers to issue debt in 50 years,” said Colin McNaught, co-founder and CEO of Bondlink.

“Interest rates have doubled and the purchasing power of mutual funds is much lower than it was a few years ago. It’s very important to keep that in mind.” On the investor side, it’s like melting ice, with investors cutting headcount and investors increasing their reliance on technology. There is. ”


“Unfortunately, this is the most difficult market for treasurers to issue debt in 50 years,” said Colin McNaught, co-founder and CEO of Bondlink.

He pointed to recent layoffs by Vanguard, the largest investor in the Muni market, as a key indicator as to why Muni demand has declined. He urged issuers to think of disclosure as a process rather than a single event.

“We need to think through the loan offer,” McNaught said. “We’re going to issue a bond and we’re going to pay it back over 20 years. I have an obligation to share information over the next 20 years.” “What processes do we need to put in place as a publisher so that we can do that very easily?”

It is also important for publishers, especially smaller publishers with far fewer resources, to avoid placing the burden of disclosure on lawyers.

“There may be a tendency to shift the burden of disclosure and say it’s actually the attorney’s responsibility,” said Daniel Wiles, assistant treasurer and tax collector for finance and investments in the Los Angeles County Treasurer’s Office. Ta. “If you look at things like enforcement, the reality is it’s not someone else’s responsibility. Their responsibility comes from you. As a publisher, it’s your disclosure, you’re the person closest to the scene, You should take the opportunity to actually make it your own disclosure. ”

In it, Wiles said that as a publisher, it’s important to think about what other people, including investors, want, but it’s important to think about what keeps you up at night and understand the threats and weaknesses you face. He said that is also important.

“One of the most significant problems in the local securities market is that issuers are entrusting outsiders with responsibilities that only they can fulfill,” said Daniel Deaton, a partner at Nixon Peabody. Stated. “We assist in providing advice, structure, and understanding about the nature of these responsibilities. However, we do not supersede the knowledge, judgment, and perspective of the city manager, county manager, financial officer. to know the actual ebbs and flows and pressure points of that government’s fiscal situation. ”

Mr. Wiles also notes that what is important to a small issuer may not be important to a large issuer, so it is important for both discovery attorneys and issuers to fully understand what is important. He pointed out that there is. But overall, issuers that are highly successful with voluntary and ongoing disclosure treat investors like other human beings.

“The common denominator among people who are doing this well is humanizing it, creating relationships with investors, understanding their needs for this information, and building mechanisms to ensure that those needs are met. That’s what we do,” Deaton said.

“If you approach it that way, it’s not difficult, it’s actually pretty easy,” Deaton added. “Where we go off track is when we start treating it like this scary other world that’s outside of what we’re doing. “It’s just different people with different characteristics.” It’s actually easier to meet than many other needs that are met.”

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