Issuer's Role in Selection of Underwriter's Counsel
GFOA recommends that Issuers minimize their involvement in the selection of underwriter’s counsel. However, it is appropriate for the issuer to ensure that underwriter’s counsel is competent, has no conflicts of interest, and that costs are reasonable.
Types of Legal Counsel
Issuers often engage with a variety of legal advisors as part of the financing team when undertaking the issuance of municipal bonds. Issuers should be aware of the different roles played by the types of counsel involved in a bond transaction. In addition, issuers should clearly communicate with the various legal advisors to determine the scope of services to be provided by each to avoid duplication or omission of key services and reduce costs. Issuers should discuss any potential conflicts of interest with the team, especially if one firm is playing multiple roles in a bond transaction.
Selecting and Managing Municipal Advisors
Issuers should hire a municipal advisor (MA) prior to the undertaking of a debt financing unless the issuer has sufficient in-house expertise and access to current bond market information, and issuers should select municipal advisors on the basis of merit using a competitive process and that issuers review those relationships periodically.
Selecting Bond Counsel
Issuers should select bond counsel on the basis of merit using a competitive process and review those relationships periodically.
Selecting and Managing Underwriters for Negotiated Bond Sales
Unless the issuer has sufficient in-house expertise and access to current market information, it should hire an outside municipal advisor prior to undertaking a negotiated debt financing in order to assist the government with evaluating proposals from underwriters, selecting the underwriter(s) for the transaction, and executing the bond sale.