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All attorneys representing municipal and other public sector clients should be aware of the potential for a United States Securities and Exchange Commission (SEC) investigation of their clients’ public bond deals.  Issuers generally will hire a team of professionals with specialized experience in public finance to assist them in completing a financing; such professionals commonly include bond counsel, disclosure counsel, and a municipal advisor.  But even the general practice solicitor that handles all day-to-day legal issues for the client will play an important role in the financing process.
Continue Reading Solicitors: Help Avoid Targeting by the SEC in Municipal Bond Offerings

Since September 2021, the United States Securities and Exchange Commission (the SEC) has brought five enforcement actions regarding municipal bond financings.  The issuers of these bonds are Sweetwater Union High School District (Texas); Crosby Independent School District (California); Town of Sterlington (Louisiana); City of Rochester (and its school district) (New York); and Johnson City (Texas).  In each case, the issuers and other involved parties were charged with providing false and misleading information to municipal bond investors.  Enforcement was not limited to entities; individuals representing the issuers were also targeted. Additional information about these cases (and earlier cases) is available on the SEC website, at https://www.sec.gov/municipal/oms-enforcement-actions.html.

Here are seven lessons to be learned from these cases:
Continue Reading Seven Lessons to be Learned from Recent SEC Enforcement Actions Involving Municipal Bond Financings

The Securities and Exchange Commission (SEC) recently charged two chief financial officers of school districts with misleading investors in municipal bond offerings.  This should be a warning to municipal CFOs to be very careful to make appropriate disclosures when involved in their public entities’ bond issues.  An SEC official recently stated that “the SEC is committed to holding bad actors in municipal securities offerings accountable for their misconduct.”  Don’t be the CFO bad actor that the SEC targets!
Continue Reading Municipal CFOs: Be Careful of your Bond Disclosures; the SEC is Gunning for You

As colleges and universities develop and implement sustainability plans to reduce their carbon footprint, there remains the question as to how to fund these sustainability plans.  Some colleges and universities look to federal and state grants for a portion of this funding and some look to donors.  In addition to these options,  there is a new development in the debt market which could also lead to lower interest rates for issuers as a result of increased demand:  ESG bonds and Green bonds.
Continue Reading Why ESG Bonds and Green Bonds May Help Colleges and Universities with Their Sustainability Plans

McNees is hosting a Municipal Roundtable to discuss the issues of disclosure in the secondary market. This discussion will include an overview of SEC Rule 15c2-12 and cover everything from the simple things issuers do wrong to ESG disclosure and disclosure by distressed issuers. Participants will also have the ability to ask questions in this…

A municipality or school district that is issuing debt (referred to herein as an “issuer”) needs to employ legal counsel to assist it with the debt issuance process. There are several legal roles in a bond issuance, two of which involve representing the issuer.  To begin with, the issuer already has its regular solicitor who serves as the issuer’s general counsel on a wide range of legal issues, such as labor matters, bidding and contracts, land development, and litigation.  When an issuer decides to issue debt to finance or refinance a capital project, it should also retain a special counsel, known as bond counsel, to assist both the issuer and its solicitor with the debt issuance process.  Bond counsel firms specialize in the legal aspects of debt issuance, including tax law, securities law, and state statutory law.
Continue Reading The Relationship of Bond Counsel and Solicitor in a Bond Issue

The National Association of Bond Lawyers (“NABL”) recently sent a letter to Congress, outlining some measures it recommends Congress adopt to combat the economic downturn related to the Coronavirus COVID-19 Pandemic.  The suggestions are a mix of previously-made requests and new suggestions to inject additional liquidity into the market.

NABL’s recommendations, addressed to the top…

The MSRB is finalizing some user-friendly enhancements to the Electronic Municipal Market Access (EMMA) website, the website designated by the US Securities and Exchange Commission as the official source for municipal securities data and disclosure documents. The enhancements follow new continuing disclosure rules that will increase the volume of information required to be disclosed on EMMA. The MSRB expects that the enhancements will make it easier for issuers and obligated persons to submit information, and for the public to access it. The enhancements should roll out for public use this summer.
Continue Reading EMMA Gets a Makeover: Enhancements Coming in Summer 2019

Last week amendments to the SEC continuing disclosure rules for municipal bonds went into effect. Under the new rules, municipalities that are planning a public offering of municipal bonds must update their continuing disclosure agreements to include covenants to disclose each of the following:

  • Incurrence of a financial obligation of the obligated person, if material,

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