1
The Seven Hobbits of Continuing DisclosureBest Practices and Example Filings
Presentation by:
Erika Miller, Assistant Vice President
July 19, 2012
Sandra Park, Assistant Vice President
Section Page
I Prepare for the Journey – Background Information
II Seek First to Understand and then to be Understood – Filing Requirements
III Put First Things First – What You Need for Filing(s) on EMMA
TABLE OF CONTENTS
IV Overcome Your Fears – Registration
a. Organization
b. Individual Userc. Change Account Information
V 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
VI Synergize – Resources
VII Take a Chance – Question & Answer Session
2
DISCLOSURE
DisclosureThis material contains proposed terms and conditions that are indicative and for discussion purposes only. Finalizedterms 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 financingoptions will be available at the time of the contemplated transaction. Where indicated, this presentation may
i i f i d i d f h h S&Y Whil b li h i f i b dcontain information derived from sources other than S&Y. While we believe such information to be accurate andcomplete, S&Y does not guarantee the accuracy of this information. This material is based on information currentlyavailable to S&Y or its sources and we do not undertake to update the recipient of this presentation of changesthat may occur in the future. Stone & Youngberg does not provide accounting, tax or legal advice; however, youshould be aware that any proposed indicative transaction could have accounting, tax, legal or other implications thatshould 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 ” f― J.R.R. Tolkien, The Return of the King
Image: New Line Cinema
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 marketRequires 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 www.emma.msrb.org.
Filings are required as long as the bonds remain outstanding
Page 4
Part of the Due Diligence process
Be Proactive versus Reactive
Electronic Municipal Market Access portal
Centralized collection of municipal disclosure documents and trade data that provides public access, free of charge, to the information
www.emma.msrb.org
Person Confirming You:
Page 5
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 RingsJ , f g
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.
Page 7
Check your Continuing Disclosure Certificate in the appendices of your final Official Statement
Let your Auditors know
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.
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;
(Taken from OS)
Page 8
g ;Table 11 - Property Tax Assessment Ratios;Table 12 - Real and Secured Property Taxes Levied and Collected;Table 14 - Secondary Assessed Valuation by Property Classification; andTable 15 - Assessed Valuation of Major Taxpayers.
Annual Financial Information
Section 3. Provision of Annual Reports.
Section 3.Provision of Annual Reports.
(a) The District shall, or shall cause the Dissemination Agent to, not later than February 1 of each year (the
(Taken from OS)
"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 ofthis Disclosure Certificate. Currently, filings are required to be made with EMMA. Not later than fifteen (15) business daysprior 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 partthereof by the Filing Date required in subsection (a) above, the District shall promptly send a notice to EMMA in substantiallythe 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 toprovide to EMMA a copy of its audited financial statements within 30 days of receipt thereof by the District, then the Districtshall promptly send a notice to EMMA in substantially the form attached as Exhibit B.
Page 9
(d) (i) The Dissemination Agent (if any) shall determine each year prior to the date(s) for providing the AnnualReport the proper address of EMMA, and
(ii) If the Dissemination Agent is other than the District, the Dissemination Agent shall file a report or reportswith the District certifying that the Annual Report has been provided pursuant to this Disclosure Certificate, stating the date theAnnual Report was provided.
6
Material Event Requirement
Principal and interest payment delinquency Always
Unscheduled draws on debt service reserves reflecting financial difficulties Always
Unscheduled draws on credit enhancements reflecting financial difficulties Always
Material Event(s)Type of Submission: EVENT FILING
Substitution of credit or liquidity providers, or their failure to perform Always
Defeasances Always
Rating changes Always
Non-payment related defaults If material
Modification to rights of security holders If material
Bond calls If material
Release, substitution or sale of property securing repayment of securities If material
Certain events affecting the tax status of security and other material notices/determinations with Alwaysrespect to tax status of security, or other events affecting tax status of security
Tender offers Always
Bankruptcy, insolvency, receivership or similar event of issuer or obligated person Always
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
If material
Appointment of successor or additional trustee or change in name of a trustee If material
Continuing Disclosure Certificates dated on or after December 1, 2010Within 10 business days
Continuing Disclosure Certificates dated before December 1 2010
When do Material Event Filing(s) Need to be Made
Continuing Disclosure Certificates dated before December 1, 2010In a “Timely manner”
Page 11
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 ResourcesUsername/Password IssuerWord-Searchable PDF Document
IssuerAuditorB d C lBond CounselInvestment Banker
CUSIP-6 or CUSIP-9 Official StatementInvestment BankerBond Counsel
List of Affected Bond Issues Official StatementInvestment BankerBond Counsel
Tickler System Outlook
Process should take less than 30 minutes
Page 13
Tickler System Outlook
8
What is a CUSIP (Committee on Uniform Security Identification Procedures)?
Identification number assigned to each maturity of an
CUSIP
Identification number assigned to each maturity of an issue (i.e. serial number)
Example: 3 6 7 7 9 6 A X 6
CUSIP-6 = base that uniquely identifies the Issuer
i F ll hi U ifi d S h l
Identifies exact bond issue
“check digit”
Page 14
i.e. Fellowship Unified School District
i.e. School Improvement Bonds,
Project of 2010, Series A (2012)
Where Do I Find My CUSIP?
Resources for CUSIP Retrieval:Official StatementSearch: “I don’t know my CUSIP-9s: Select to search for CUSIP-9s or to input a pCUSIP-6”CUSIP’s Municipal Issuer Access Web Service
CUSIP-6Provides base information
for most filings
Page 15
Add to CUSIP-6 for CUSIP-9 level
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?
Register1. www.msrb.org2. Choose Issuers3 Click on “Create an
Page 17
3. Click on Create an MSRB Gateway Account” link
10
4. Choose: I am registering as an issuer, obligor and/or agent to submit documents to EMMA5. Click the “Next” button6. Review the Set-up Guidelines and click the “Accept” button
How Do I Register as an Organization?
Page 18
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
How Do I Register as an Organization?
9 Identify Master Account Administrator and complete
Page 19
9. Identify Master Account Administrator and complete the contact information then click the “OK” button
11
10. Select “My organization is an Issuer”11. Enter Federal Tax Employer Identification Number and click the “OK” button
How Do I Register as an Organization?
Page 20
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.)
13. Select how required document will be provided and click on “OK” button.
How Do I Register as an Organization?
14 Review information and upon
Page 21
14. Review information and upon completion click on “Confirm” button.
12
How Do I Register as an Individual User?
Register1. www.msrb.org2. Choose Issuers3 Click on “Create an
Page 22
3. Click on Create an MSRB Gateway Account” link
How Do I Register as an Individual User?4. Choose: I am registering as an issuer, obligor and/or agent to submit documents to EMMA5. Step 1: Enter Email Address6. Step 2: Enter User Information
Page 23
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 Email Address: [email protected]. Step 6: Information Verification – Submit or Edit User Details
Confirmer:[email protected]
Page 25
14
How Do I Register/Change Account Information?15. You will receive a confirmation email 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 ppy g yhappened? But in the end, it’s only a passing thing… this shadow. Even darkness must pass.” -Sam― J.R.R. Tolkien, The Two Towers
15
Example Filing: Audited Financials
Example Filing: Audited FinancialsLogin to www.emma.msrb.org
1. Select EMMA Dataport2. Login to MSRB GATEWAY
Page 29
16
Example Filing: Audited Financials3. 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 30 207. Year Ended: June 30, 20__8. Click Next
Audited Financial Statement or CAFR (Rule 15c2-12)
Page 31
17
9. Filings are Associated with CUSIPsChoose “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
I t CUSIP 6
Example Filing: Audited Financials
Input CUSIP-6
Page 32
10. Select applicable issues (or Select all Issues for Issuer)
Example Filing: Audited Financials
Expand the issue
by clicking the [+]
Page 33
by Issue Name by Dated Date All Issues
18
11. Upload document12. Preview13. Publish
Example Filing: Audited Financials
Page 34
14. Yes: Publish15. Print/Preview Submission16. Logout of MSRB GATEWAY
Example Filing: Audited Financials
Page 35
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
EXHIBIT ANOTICE OF FAILURE TO FILE ANNUAL REPORT
Name of Issuer: Suncat Unified School District No. 99 of Combo County, ArizonaName of Bond Issue: $25,000,000 School Improvement Bonds, Project of 2009, Series B(2011)
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”)
(Found in OS)
Page 37
Dated date of Bonds: [Closing Date]CUSIP: 367796
NOTICE IS HEREBY GIVEN that the District has not provided an Annual Report withrespect to the above-named Bonds as required by Section 3(a) of the DisclosureCertificate dated [Closing Date]. The District anticipates that the Annual Report for fiscalyear ended June 30, _____ will be filed by ______________________.
Dated: ______________
20
Example Filing: Rating Change
1. Save PDF of Rating Report
2. Login to www emma msrb org
Example Filing: Rating Change
www.emma.msrb.org
3. Choose EMMA Dataport
4. Login to MSRB GATEWAY
5. Continuing Disclosure Submissions – choose CREATE
Page 39
21
6. Choose Event Filing
7. Enter Document Date:
Example Filing: Rating Change
[date of rating report]
8. Check Rating Change
Page 40
9. Filings are Associated with CUSIPsChoose “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
I t CUSIP 6
Example Filing: Rating Change
Input CUSIP-6
Page 41
22
10. Select applicable issues (or Select all Issues for Issuer)
Example Filing: Rating Change
Expand the issue
by clicking the [+]
Page 42
by Issue Name by Dated Date All Issues
11. Upload rating report document
12. Preview13. Publish
Example Filing: Rating Change
Page 43
23
14. Yes: Publish15. Print/Preview Submission16. Logout of MSRB GATEWAY
Example Filing: Rating Change
Page 44
Example Filing: Bond Insurer Rating Change
24
Reminder: for those with Continuing Disclosure Undertakings on or after 12/1/10, you are required to file these n tices ithin 10
Example Filing: Bond Insurer Rating Change
notices within 10 business days of the event
Click on link
Save PDF “REPORT Insurer Rating Change 12-22 10 df”
Page 46
22-10.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
Example Filing: Bond Insurer Rating Change
Page 47
CUSIP-6Dated Date
(Helps identify the issues affected)
Issuer
25
1. Login to www.emma.msrb.org
2. Choose EMMA Dataport3. Login to MSRB GATEWAY4 C ti i Di l
Example Filing: Bond Insurer Rating Change
4. Continuing Disclosure Submissions – choose CREATE
5. Choose Event Filing6. 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…”
Page 49
8. C oose o t ow y CUS 9s…9. Input CUSIP-6 from Excel file
26
10. Select applicable issues
Choose issues with Dated Date of affected issues listed in
Example Filing: Bond Insurer Rating Change
issues listed in Excel file
by Dated Date (see Excel file)
Page 50
11. Select Contact (if different from submitter)
12. Upload document13. Preview14. Publish
Example Filing: Bond Insurer Rating Change
Page 51
27
15. Yes: Publish16. Print/Preview Submission17. Logout of MSRB GATEWAY
Example Filing: Bond Insurer Rating Change
Page 52
Synergize – Resources
“All's well that ends better.” ― J.R.R. Tolkien, The Lord of the Rings
28
EMMA Dataport webpage = Manual for Continuing Disclosure Submission (PDF)
MSRB’s Market Information Department:703-797-6668
ResourcesInformation and screenshots derived from the Municipal Securities Rulemaking Board (www.emma.msrb.org).
Municipal Securities Rulemaking Board1900 Duke Street, Suite 600Alexandria, VA 22314703-797-6600Fax: 703-797-6700
Page 54
Bond Counsel
Investment Banker
Dissemination Agent
Grant HamillManaging Director(602) 794-4006h ll@ ll
Robert CasillasManaging Director(602) 794-4001
ll @ ll
Michael LaValleeManaging Director(602) 794-4008
l ll @ ll
Contact Information
[email protected]@syllc.com
Mark ReaderManaging Director(602) 794-4011
Bryan LundbergManaging Director(602) 794-4007
Dr. Judy RichardsonVice President
(602) [email protected]
Randie SteinVice President
Erika MillerAssistant Vice President
Sandra ParkAssistant Vice President
Page 55
(602) [email protected]
(602) [email protected]
(602) [email protected]
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.-FrodoFrodo: “What are we holding onto, Sam?”Sam: “That there's some good in this world, Mr. Frodo... and it's worth fighting for” Sam: That there s some good in this world, Mr. Frodo... and it s worth fighting for ― J.R.R. Tolkien, The Two Towers