The following checklist has been developed to assist small and new issuers in the process of issuing bonds. GFOA has numerous best practices and related materials to support all of the items on the checklist, which are linked at the bottom of this resource.
Has the issuer retained a municipal advisor?
Has the issuer retained a municipal advisor (the issuer should determine if they wish to use a municipal advisor that is or is not associated with a municipal broker/dealer firm) and bond counsel to, among other tasks, assist the issuer in determining the most appropriate method of sale: competitive, negotiated, bank qualified, bank loan or private placement? Is the issuer aware of new SEC regulations over municipal advisors, and the changes regarding if and when an underwriter may provide advice to the issuer? Has the issuer discussed the possibilities of using disclosure counsel in addition to bond counsel?
Is the type of debt being considered the most appropriate form for the type of project being financed?
For example, if the capital improvement is for a revenue-generating project or system, the use of revenue bonds may be a better financing option than using a portion of the government’s limited general obligation bonding capacity.
Is the maturity structure appropriate?
Does the maturity structure and estimated debt service match the anticipated flow of revenues available for debt service in a manner that will not raise credit concerns and will unduly contribute to a favorable market reception?
Do the terms and conditions allow for a competitive response?
For a competitive sale, do the terms and conditions of sale as described in the Notice of Sale allow potential bidders sufficient flexibility to structure the most favorable bid possible?
Does the underwriter request for proposals (RFP) request sufficient information to enable the issuer to select the most qualified firm at the best price?
For a negotiated sale, does the underwriter request for proposals (RFP) request sufficient information to enable the issuer to select the most qualified firm at the best price? Does the RFP process provide a transparent and objective evaluation/ranking of respondents, free of undue political influence? Additionally, does the RFP require the underwriter to provide information on the cost of borrowing for the duration of the bonds, not just the cost of issuance, as well as having the underwriter provide at sale pricing comparables and a post-pricing book showing market conditions at the time of the sale and other sales in the market at the time of the sale?
Has the issuer developed a preliminary official statement, official statement, and other disclosure documents?
Depending on method of sale and applicable state laws, has the issuer, with assistance from its municipal advisor and/or bond counsel, developed a preliminary official statement, official statement or other disclosure documents, and are they being properly distributed?". Also, does the preliminary official statement and/or other disclosure documents meet or exceed industry standards?
Have you consulted with legal counsel?
Has legal counsel been consulted to ensure that all tax and legal requirements been satisfied, including any public notices as directed by state or federal laws? Has the muncipal advisor and/or bond counsel been consulted to ensure that the appropriate level of investor outreach has been conducted?
Have credit ratings been sought for the issue?
Has the municipal advisor and/or bond counsel been consulted as to how many different ratings should or need to be obtained for this type of bond issue? Has the municipal advisor and/or bond counsel been consulted about using bond insurance or other credit enhancements for the issue especially if the rating is, or is expected to be A or lower?
Do you have post-issuance compliance policies?
Have post issuance compliance policies and procedures been adopted, to ensure compliance and understanding of what is required by the issuer on an ongoing basis?
Do you understand all fees involved in issuing debt?
Do the appropriate issuer officials and representatives have an understanding of all the fees that the issuer must pay in conjunction with the bond transaction? Have the municipal advisor and/or other professionals been consulted about these various fees and if they are necessary and appropriate for a financing of this nature, size and complexity