The Seven Hobbits of Continuing Disclosure

Transcription

1 The Seven Hobbits of Continuing Disclosure Best Practices and Example Filings Presentation by: Erika Miller, Assistant Vice President Sandra Park, Assistant Vice President July 19, 2012 TABLE OF CONTENTS Section I II III IV V VI VII Prepare for the Journey Background Information Seek First to Understand and then to be Understood Filing Requirements Put First Things First What You Need for Filing(s) on EMMA Overcome Your Fears Registration a. Organization b. Individual User c. Change Account Information Perseverance Example Filings a. Filing Audited Financials b. Filing if Audit is not Ready or Late Filing c. Filing a Rating Change d. Filing a Bond Insurer Rating Change Synergize Resources Take a Chance Question & Answer Session Page 1

2 DISCLOSURE Disclosure This material contains proposed terms and conditions that are indicative and for discussion purposes only. Finalized terms and conditions are subject to further discussion and negotiation and Stifel, Nicolaus & Company, Incorporated, dba Stone & Youngberg, a Division of Stifel Nicolaus ( S&Y ) does not guarantee that all financing options will be available at the time of the contemplated transaction. Where indicated, this presentation may contain information i derived d from sources other than S&Y. While we believe such information i to be accurateand complete, S&Y does not guarantee the accuracy of this information. This material is based on information currently available to S&Y or its sources and we do not undertake to update the recipient of this presentation of changes that may occur in the future. Stone & Youngberg does not provide accounting, tax or legal advice; however, you should be aware that any proposed indicative transaction could have accounting, tax, legal or other implications that should be discussed with your advisors and /or counsel. Prepare for the Journey Ahead Background Information Many folk like to know beforehand what is to be set on the table; but those who have laboured to prepare the feast like to keep their secret; for wonder makes the words of praise louder." - Gandalf J.R.R. Tolkien, The Return of the King Image: New Line Cinema 2

3 Continuing Disclosure Undertaking Mandated by U.S. Securities and Exchange Commission Rule 15c2-12 of the Securities Exchange Act of 1934 Intent is to deter fraud and manipulation by improving the availability of information about municipal securities outstanding in the secondary market Requires non-exempt municipal debt issuers to provide certain financial information, including audited financials as well as prompt notice of material events, to a single national repository hosted by the Municipal Securities Rulemaking Board (MSRB). Electronic Municipal Market Access (EMMA) portal located at Filings are required as long as the bonds remain outstanding Part of the Due Diligence process Be Proactive versus Reactive Page 4 Electronic Municipal Market Access portal Centralized collection of municipal disclosure documents and trade data that provides public access, free of charge, to the information Person Confirming You: phickey@syllc.com Page 5 3

4 Seek First to Understand and then to be Understood Filing Requirements For you do not yet know the strengths of your hearts, and you cannot foresee what each may meet on the road. J.R.R. Tolkien, The Lord of the Rings Image: New Line Cinema What am I Filing? Type of Submission: FINANCIAL/OPERATING FILING Annual financial information Annual financial information : financial information or operating data, provided at least annually, of the type included in the final official statement with respect to an obligated person, or in the case where no financial information or operating data was provided in the final official statement with respect to such obligated person, of the type included in the final official statement with respect to those obligated persons that meet the objective criteria applied to select the persons for which financial information or operating data will be provided on an annual basis. Check your Continuing Disclosure Certificate in the appendices of your final Official Statement Let your Auditors know Page 7 4

5 Annual Financial Information "Annual Report" shall mean the annual report provided by the District pursuant to, and as described in, Sections 3 and 4 of this Disclosure Certificate. i.e. Comprehensive Annual Financial Report Section 4. Content of Annual Reports. (Taken from OS) Table 2 - Average Daily Membership; Table 6 - Direct General Obligation Bonded Debt Outstanding and to be Outstanding; Table 7 - Constitutional Debt Limit/Unused Borrowing Capacity after Bond Issuance; Table 8 - Statutory Debt Limit/Unused Borrowing Capacity after Bond Issuance; Table 10 - Direct and Overlapping General Obligation Bonded Debt Ratios; Other Obligations; Table 11 - Property Tax Assessment Ratios; Table 12 - Real and Secured Property Taxes Levied and Collected; Table 14 - Secondary Assessed Valuation by Property Classification; and Table 15 - Assessed Valuation of Major Taxpayers. Page 8 Annual Financial Information Section 3. Provision of Annual Reports. Section 3.Provision of Annual Reports. (Taken from OS) (a) The District shall, or shall cause the Dissemination Agent to, not later than February 1 of each year (the "Filing Date"), commencing February 1, 2012, provide electronically to MSRB, in a format prescribed by the MSRB, an Annual Report for the fiscal year ending on the preceding June 30 which is consistent with the requirements of Section 4 of this Disclosure Certificate. Currently, filings are required to be made with EMMA. Not later than fifteen (15) business days prior to the Filing Date, the District shall provide the Annual Report to the Dissemination Agent (if any). (b) If the District is unable or for any reason fails to provide electronically to EMMA an Annual Report or any part thereof by the Filing Date required in subsection (a) above, the District shall promptly send a notice to EMMA in substantially the form attached as Exhibit A not later than the Filing Date. (c) If the District's audited financial statements are not submitted with the Annual Report and the District fails to provide to EMMA a copy of its audited financial statements within 30 days of receipt thereof by the District, then the District shall promptly send a notice to EMMA in substantially the form attached as Exhibit B. (d) (i) The Dissemination Agent (if any) shall determine each year prior to the date(s) for providing the Annual Report the proper address of EMMA, and (ii) If the Dissemination Agent is other than the District, the Dissemination Agent shall file a report or reports with the District certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date the Annual Report was provided. Page 9 5

6 Material Event(s) Type of Submission: EVENT FILING Material Event Principal and interest payment delinquency Unscheduled draws on debt service reserves reflecting financial difficulties Unscheduled draws on credit enhancements reflecting financial difficulties Substitution of credit or liquidity providers, or their failure to perform Defeasances Rating changes Non-payment related defaults Modification to rights of security holders Bond calls Release, substitution or sale of property securing repayment of securities Certain events affecting the tax status of security and other material notices/determinations with respect to tax status of security, or other events affecting tax status of security Tender offers Bankruptcy, insolvency, receivership or similar event of issuer or obligated person Merger, consolidation or acquisition involving sale of all or substantially all of its assets (other than in ordinary course of business) or the entry into or termination of an agreement relating to such actions Appointment of successor or additional trustee or change in name of a trustee Requirement Always Always Always Always Always Always If material If material If material If material Always Always Always If material If material When do Material Event Filing(s) Need to be Made Continuing Disclosure Certificates dated on or after December 1, 2010 Within 10 business days Continuing Disclosure Certificates dated before December 1, 2010 In a Timely manner Page 11 6

7 Put First Things First What you need for the Filing(s) on EMMA It's the job that's never started as takes longest to finish. J.R.R. Tolkien, The Lord of the Rings What You Will Need Prior to Filing Item Needed Username/Password Word-Searchable PDF Document CUSIP-6 or CUSIP-9 List of Affected Bond Issues Tickler System Resources Issuer Issuer Auditor Bond Counsel Investment Banker Official Statement Investment Banker Bond Counsel Official Statement Investment Banker Bond Counsel Outlook Process should take less than 30 minutes Page 13 7

8 CUSIP What is a CUSIP (Committee on Uniform Security Identification Procedures)? Identification number assigned to each maturity of an issue (i.e. serial number) Example: A X 6 CUSIP-6 = base that uniquely identifies the Issuer i.e. Fellowship Unified School District Identifies exact bond issue i.e. School Improvement Bonds, Project of 2010, Series A (2012) check digit Page 14 Where Do I Find My CUSIP? Resources for CUSIP Retrieval: Official Statement Search: I don t know my CUSIP-9s: Select to search for CUSIP-9s or to input a CUSIP-6 CUSIP s Municipal Issuer Access Web Service CUSIP-6 Provides base information for most filings Add to CUSIP-6 for CUSIP-9 level Page 15 8

9 Overcome Your Fears - Registration All we have to do is decide what to do with the time that is given to us. J.R.R. Tolkien, The Lord of the Rings Image: New Line Cinema How Do I Register as an Organization? Register Choose Issuers 3. Click on Create an MSRB Gateway Account link Page 17 9

10 How Do I Register as an Organization? 4. Choose: I am registering as an issuer, obligor and/or agent to submit documents to EMMA 5. Click the Next button 6. Review the Set-up Guidelines and click the Accept button Page 18 How Do I Register as an Organization? 7. Choose if there is an existing user account that will be used or if it is a new registration and click the OK button 8. Provide organization details and click the OK button 9. Identify Master Account Administrator and complete the contact information then click the OK button Page 19 10

11 How Do I Register as an Organization? 10. Select My organization is an Issuer 11. Enter Federal Tax Employer Identification Number and click the OK button 12. You will need to upload PDF, fax or mail the documents. (Tax EIN number on organization letterhead or another form of identification (e.g. page from Official Statement, federal or state tax document)). (See SYNERGIZE - Resources for fax and mailing information.) Page 20 How Do I Register as an Organization? 13. Select how required document will be provided and click on OK button. 14. Review information and upon completion click on Confirm button. Page 21 11

12 How Do I Register as an Individual User? Register Choose Issuers 3. Click on Create an MSRB Gateway Account link Page 22 How Do I Register as an Individual User? 4. Choose: I am registering as an issuer, obligor and/or agent to submit documents to EMMA 5. Step 1: Enter Address 6. Step 2: Enter User Information Page 23 12

13 How Do I Register as an Individual User? 7. Step 3: Organization Information Copy values from user details (unless you want different) 8. Step 4: Add Roles Select Issuer Page 24 How Do I Register as an Individual User? 9. Step 5: Confirmation (Electronic) Type Confirmer s Address: phickey@syllc.com 10. Step 6: Information Verification Submit or Edit User Details Confirmer: phickey@syllc.com Page 25 13

14 How Do I Register/Change Account Information? 15. You will receive a confirmation from the MSRB. To View/Update Account Information login to MSRB Gateway Main Menu Page 26 Perseverance Example Filings It's like in the great stories, Mr. Frodo. The ones that really mattered. Full of darkness and danger they were. And sometimes you didn t want to know the end because how could the end be happy? How could the world go back to the way it was when so much bad had happened? But in the end, it s only a passing thing this shadow. Even darkness must pass. - Sam J.R.R. Tolkien, The Two Towers 14

15 Example Filing: Audited Financials Example Filing: Audited Financials Login to 1. Select EMMA Dataport 2. Login to MSRB GATEWAY Page 29 15

16 Example Filing: Audited Financials 3. Continuing Disclosure Submissions choose CREATE 4. Choose Financial/Operating Filing Page 30 Example Filing: Audited Financials 5. Check Audited Financial Statements or CAFR (Rule 15c2-12) 6. Consisting of: Comprehensive Annual Financial Report 7. Year Ended: June 30, Click Next Audited Financial Statement or CAFR (Rule 15c2-12) Page 31 16

17 Example Filing: Audited Financials 9. Filings are Associated with CUSIPs Choose I don t know my CUSIP-9s: Select to search for CUSIP-9s or to input a CUSIP-6 Input CUSIP-6 from Official Statement or as provided Input CUSIP-6 Page 32 Example Filing: Audited Financials 10. Select applicable issues (or Select all Issues for Issuer) Expand the issue by clicking the [+] by Issue Name by Dated Date All Issues Page 33 17

18 Example Filing: Audited Financials 11. Upload document 12. Preview 13. Publish Page 34 Example Filing: Audited Financials 14. Yes: Publish 15. Print/Preview Submission 16. Logout of MSRB GATEWAY Page 35 18

19 Example Filing: Late Filing and/or Audit is Not Ready in Time Late Filing and/or Audit is Not Ready in Time Failure to provide annual financial information as required File Notice of Failure to File Audited Financial Statements File Annual Financial Report File Content of Annual Reports (see page 8 for example) File Audit as soon as available (choose Audited Financial Statements or CAFR Rule 15c2-12 ) EXHIBIT A NOTICE OF FAILURE TO FILE ANNUAL REPORT (Found in OS) Name of Issuer: Suncat Unified School District No. 99 of Combo County, Arizona Name of Bond Issue: $25,000,000 School Improvement Bonds, Project of 2009, Series B (2011) Dated date of Bonds: [Closing Date] CUSIP: NOTICE IS HEREBY GIVEN that the District has not provided an Annual Report with respect to the above-named Bonds as required by Section 3(a) of the Disclosure Certificate dated [Closing Date]. The District anticipates that the Annual Report for fiscal year ended June 30, will be filed by. Dated: Page 37 19

20 Example Filing: Rating Change Example Filing: Rating Change 1. Save PDF of Rating Report 2. Login to msrb 3. Choose EMMA Dataport 4. Login to MSRB GATEWAY 5. Continuing Disclosure Submissions choose CREATE Page 39 20

21 Example Filing: Rating Change 6. Choose Event Filing 7. Enter Document Date: [date of rating report] 8. Check Rating Change Page 40 Example Filing: Rating Change 9. Filings are Associated with CUSIPs Choose I don t know my CUSIP-9s: Select to search for CUSIP-9s or to input a CUSIP-6 Input CUSIP-6 from Official Statement or as provided Input CUSIP-6 Page 41 21

22 Example Filing: Rating Change 10. Select applicable issues (or Select all Issues for Issuer) Expand the issue by clicking the [+] by Issue Name by Dated Date All Issues Page 42 Example Filing: Rating Change 11. Upload rating report document 12. Preview 13. Publish Page 43 22

23 Example Filing: Rating Change 14. Yes: Publish 15. Print/Preview Submission 16. Logout of MSRB GATEWAY Page 44 Example Filing: Bond Insurer Rating Change 23

24 Example Filing: Bond Insurer Rating Change Reminder: for those with Continuing Disclosure Undertakings on or after 12/1/10, you are required to file these notices within 10 business days of the event Click on link Save PDF REPORT Insurer Rating Change pdf This will be the file you Upload Open Excel File CDU LIST AZ Issuers Bloomberg-Insurer This will provide you CUSIP-6 and specific issues affected Page 46 Example Filing: Bond Insurer Rating Change CUSIP-6 Dated Date (Helps identify the issues affected) Issuer Page 47 24

25 Example Filing: Bond Insurer Rating Change 1. Login to 2. Choose EMMA Dataport 3. Login to MSRB GATEWAY 4. Continuing i Disclosure Submissions choose CREATE 5. Choose Event Filing 6. Enter Document Date (Date of PDF Rating Report Saved from Link) 7. Check Rating Change Page 48 Example Filing: Bond Insurer Rating Change 8. Choose I don t know my CUSIP-9s 9. Input CUSIP-6 from Excel file Page 49 25

26 Example Filing: Bond Insurer Rating Change 10. Select applicable issues Choose issues with Dated Date of affected issues listed in Excel file by Dated Date (see Excel file) 11. Select Contact (if different from submitter) Page 50 Example Filing: Bond Insurer Rating Change 12. Upload document 13. Preview 14. Publish Page 51 26

27 Example Filing: Bond Insurer Rating Change 15. Yes: Publish 16. Print/Preview Submission 17. Logout of MSRB GATEWAY Page 52 Synergize Resources All's well that ends better. J.R.R. Tolkien, The Lord of the Rings 27

28 Resources EMMA Dataport webpage = Manual for Continuing Disclosure Submission (PDF) Information and screenshots derived from the Municipal Securities Rulemaking Board ( MSRB s Market Information Department: MSRBsupport@msrb.org Municipal Securities Rulemaking Board 1900 Duke Street, Suite 600 Alexandria, VA Fax: Bond Counsel Investment Banker Dissemination Agent Page 54 Contact Information Robert Casillas Managing Director (602) rcasillas@syllc.com Grant Hamill Managing Director (602) ghamill@syllc.com Michael LaVallee Managing Director (602) mlavallee@syllc.com Bryan Lundberg Managing Director (602) blundberg@syllc.com Mark Reader Managing Director (602) mreader@syllc.com Dr. Judy Richardson Vice President (602) jrichardson@syllc.com Randie Stein Vice President (602) rstein@syllc.com Erika Miller Assistant Vice President (602) esmiller@syllc.com Sandra Park Assistant Vice President (602) spark@syllc.com Page 55 28

29 Take a Chance Questions & Answers Folk in those stories had lots of chances of turning back, only they didn't. They kept going. Because they were holding on to something.-frodo Frodo: What are we holding onto, Sam? Sam: That there's some good in this world, Mr. Frodo... and it's worth fighting for J.R.R. Tolkien, The Two Towers 29