Use of Advisors

Use of Advisors

State and local governments may use financial professionals to assist in the debt management process. These financial professionals may include:

  • Financial advisors roles may vary. For competitive sales, financial advisors have a more active role throughout the debt issuance process. They will assist the government entity to determine the structure and timing of the issue, prepare bond documents and rating agency presentation, evaluate and select the best offers, and to close the transaction. For negotiated sales, the financial advisors role is to ensure that the issuer's goals and interests are represented and protected in the structuring of the transaction and establishing of the borrowing rates and yields.
  • Bond counsel advises a government on whether a proposed borrowing is legally permitted and assures compliance with borrowing requirements. The bond counsel will assist in drafting materials required for the debt issuance and ordinances or resolutions to authorize the sale.
  • Underwriters purchase securities from a government issuer and resell them to investors. Underwriting firms bid against one another for a government issuer's bonds for competitive sales. For negotiated sales the underwriters will work with an issuer and potential investors to sell the bonds.
  • Bond syndicates are often used for large bond issuances that require greater effort to purchase bonds and redistribute them to investors. Bond syndicates may be formed form underwriting firms or the issuers themselves.