Municipal bond structuring case solution, municipal bond structuring case analysis, municipal bond structuring case study solution, note on the structure of the municipal bond. A municipal bond, commonly known as a muni bond, is a bond issued by a local government or territory, or one of their agencies. A bond software package is essential to perform computations needed to compare. Munease is flexible and can be structured to meet your needs and budget. These tools simplify your municipal bond calculations and reporting by storing. Micromuni debt is a debt structuring web based application designed to assist municipal underwriters, financial advisors, and state and local governments in evaluating the debt service repayments of one or more municipal bond issues. Our issuer tools have made bondlink the goto resource for sophisticated issuers looking for an edge. Our role is to provide the knowledge, expertise, support, guidance and relationships to enable municipal issuers to access capital efficiently and fairly, whether through competitive or negotiated underwriting or via private placement. As municipal bond issuance continues to fire on all cylinders, issuers and underwriters are confronting an increasingly important crossroad. Mar 05, 2014 llc the municipal bond issuance process includes. This is good news for community banks as well as for virginias counties, cities and towns.
The industry standard for sizing and structuring of municipal bond issues, dbc finance is used by the industrys topranking underwriters and financial advisors as well as bond issuers. Manage, analyze and reconcile assessment, bond payment and delinquency information for property assessed clean energy pace program. Call prescient software if you need assistance in determining the version of munease to install. Aug 30, 2012 the video here shines a bit of light on one tiny piece of that market how to size and structure a muni bond deal using excel. Revenue bonds are municipal bonds that finance income. In 2002at the request of financial advisors and bond attorneys who had. We are also the leading provider of consulting services specializing in student loans in the assetbacked securities industry. Bond structuring structures bond issues, calculates debt service schedules, performs refunding analysis and manages bond redemptions. Dbc student loan is a modeling and structuring program for the structuring and. It is generally used to finance public projects such as roads, schools, airports and seaports, and infrastructurerelated repairs. Most municipal bonds are taxexempt bondholders do not pay state of federal income tax on interest earnings from municipal bond investors are willing to purchase bond at lower interest rate irs reprieve to help local governments fund projects and compete in the capital market for investors against corporate bond issuers.
Structure financial software bond utilities public finance. Taxexempt municipal bonds while most of us think of municipal bonds or munis as debt obligations issued by the commonwealth, cities, counties, or towns, in virginia many munis are issued by public utility authorities, economic development. Mar 03, 2014 a municipal bond is a bond issued by a local government the state, city, or county or government agency special district, public utility, airport, seaport, or school district to pay for projects andor improvements. A negotiated sale can be a cooperative effort between the issuer and the underwriter for structuring a deal with reasonable terms.
Standalone bond financings program mt facility finance. The question has enormous significance for issuers because efficient debt structuring can save the borrower big money. Debt issuance practices relates to determining the sale method and investment of proceeds and use of credit and bond services and ratings as well as professional service providers to assist with such matters. We know small cities because its where we live and its where our commitment lies. Oct 26, 2016 introduction to municipal bonds session one. Structured bonds are attractive alternatives to conventional debt securities, because their terms can be defined flexibly. Dbc debt structuring solutions streamline the structuring and management of municipal finance and other debt issues. What are municipal bonds and other municipal bond questions.
Overview at black mountain software, we specifically focus on providing small cities with the right tools for their accounting and utility billing responsibilities. T h e m u n i c i p a l b o n d m a n a g e r munease. The underwriter for a bond financing is required to deliver to the msrb, no later than 10 business days after the execution of the bond purchase agreement, copies of the official statement and form g36os. Whats your current thinking on muni investments for higher.
Dbc portopt is a powerful optimization tool for structuring municipal bond defeasance escrows. For many local government officials and solicitors in pennsylvania, a bond issue is a rare occurrence perceived to be shrouded in mystery. Mar 06, 2018 a revenue bond is a municipal bond supported by the revenue from a specific project, such as a toll bridge, highway or local stadium. Generally, the bond offering process is a coordinated effort among various professionals. Structure is a bond sizing and structuring tool that generates complete financing solutions from simple level debt service structures, to complex common finance plans over multiyear borrowing programs and detailed revenue constraints. We understand the special situations that you face because we have actual handson experience in your roles. Everything you always wanted to know about bond structuring, but.
Once a sufficient understanding of the purpose and protocols associated with the structuring process is developed, we will explore the bond structuring process using dbc finance, the industry standard bond structuring software. Erin analytics software for the municipal finance industry. Repayment for structuring the debt service repayments of a municipal bond issue. Our goal is ultimately to create efficiencies in the marketplace, helping governments improve their disclosure and lowering issuer borrowing costs. Erin analytics is a nationally recognized leader in municipal finance software tools and debt structuring and analysis. Investors who buy municipal bonds are in effect lending money to the bond issuer in exchange for a promise of regular interest payments, usually semiannually, and the return of the original investment, or principal. This article was published in the winter 2014 edition of the municipal law section newsletter of the pennsylvania bar association. The video here shines a bit of light on one tiny piece of that market how to size and structure a muni bond deal using excel. A second, more popular alternative municipal security structure is the directpay bond. Nov 07, 20 how to structure municipal bond investments. How to structure municipal bond investments the experts.
Munease is sold in individual modules that work together seamlessly as one software product. A purchaser can select only the needed modules, and purchase other modules later as the need arises. Centerpoint fund accounting software can be locally installed or cloudbased, and is ideal for municipals with small to medium size populations looking to save significant money while still retaining the functionality needed to manage their municipal. Software for municipal bond issuers and municipal finance professionals erin analytics is a nationally recognized leader in municipal finance software tools and debt structuring and analysis. Fixed income technology for the demanding professional. Drive new business, enhance client service and increase efficiency. A revenue bond is a municipal bond supported by the revenue from a specific project, such as a toll bridge, highway or local stadium. It performs a wide variety of interest calculations including tics true interest cost, sizing calculations, refunding analyses, and arbitrag e rebate calculations. This video shows how to create a simple level debt service, municipal bond size and amortization structure using linear algebra and matlabs fminsearch function. Bonds may be structured with principal retirement at any.
Dbc software, which is now used for structuring roughly 90% of the annual negotiated municipal bond underwriting in the u. Its used to structure new portfolios and reoptimize existing portfolios for defeasance escrows, construction funds or reserve funds. The main characteristic of such bonds consists of the general terms of issue that define maturity, repayment and interest rates coupons. Municipal bonds are debt obligations issued by state and local governments in addition to other governmental entities to fund the building of highways, hospitals, schools and sewer systems, along with many other projects for the public good.
Bondlink is the goto resource for effective and creative investor outreach solutions for municipal bond issuers. This session will discuss common state law issues that need to be addressed throughout the structuring of a municipal bond transaction and related disclosure issues. How to structure municipal bond investments the experts wsj. The acacia team is uniquely qualified to assist their clients in developing and executing any finance plan to minimize interest cost and maximize flexibility, while achieving financial objectives. What is the interest structure on a municipal bond. Original maturities cant be extended, a new debt structure might fall under reissuance rules, and the bonds cant be advance refunded. We understand that, ultimately, public finance is about connecting issuers with investors. The term municipal bond is commonly used in the united states, which has the largest market of such tradeable securities in the world.
This is why relationships are the foundation of everything we do. Our innovative and powerful software products for the municipal finance industry provide stateoftheart functionality, enabling our clients the ability to deliver more to their clients. Understanding bond documents by sunita lough and debra kawecki. Interest is paid over an agreed upon period of time that. Municipal bond structuring case solution and analysis, hbr. Introduction to municipal bonds state treasurers office.
He uses goal seek to minimize the contingency and ultimately determine the debt service required to properly size the bonds. This course examines the process by which financing objectives are transformed into municipal bond transactions and other opportunities to utilize structured finance products in the health and corporate finance sectors. Debt structuring solutions investment management software. Dbc portopt is a powerful optimization tool for structuring municipal bond. The date when the issuer repays the principal, the bond s maturity date, may be years in the future. Silicon valley meets wall street in muni trading platform. Go yields by state check out the 5day average of state general obligation bond yields. Serving the municipal bond market with cuttingedge business and compliance solutions. You must have access to a computer and phone to attend the webcourse. Display event 2017 fundamentals of municipal bond law.
The municipal securities rulemaking board msrb is a selfregulating board established by brokerdealers of municipal securities. Level debt service bond sizing with excel intuitive analytics. For example, a bond issue may be enhanced by municipal bond insurance or. In the process it details the little bit of excel formula magic that every aspiring bond structuring artist must understand in order to evolve into a true ib muni bond quant. Debt management government finance officers association. Municipal bonds can bear interest at either a fixed or variable rate, but they are subject to a cap called the maximum legal limit. Apr 15, 20 this video shows how to create a simple level debt service, municipal bond size and amortization structure using linear algebra and matlabs fminsearch function. Using excel to size a muni bond deal intuitive analytics. Bankruptcy municipal bond restructuring revenue bond. Moreover, all the capital sources at table are debt. Critical to capturing true taxaware interest rate risk. The intro bond finance webcourse will take place on the web through gotowebinar, an online distance learning software.
Daily municipal bond activity distilled into the top 10 most active issues, highest yielding and average yield by maturity year. Blackrock sets a new standard in effective duration reporting with kalotay analytics aftertax methodology for municipal bond valuation. Pace bond administration software, cloud computing solutions. This free model contains the core principal sizing formula required to size a municipal bond structure in a. Like most things in life, it is only mysterious because it is unfamiliar. Our innovative and powerful software products for the municipal finance industry provide stateoftheart functionality, enabling our clients the ability. Call or email us and we will provide you with a password to install the new release. A municipal bond is a debt security issued by a state, municipality or county to finance its capital expenditures, including the construction of highways, bridges or schools. Dbc provides expert consulting services to the municipal finance community, including cash flow verifications, bond structuring, and refundings. Pace bond administration software, cloud computing. Most municipalities qualify for an investment grade rating because. Users can visually interact with structure to determine the optimum finance plan including on the fly. Acacia takes an active role in assisting its clients in the structuring and the execution of bond transactions. Municipal bond structuring case solution,municipal bond structuring case analysis, municipal bond structuring case study solution, note on the structure of the municipal bond.
Tips for investing in municipal bonds bonds us news. Mffa standalone bond financing transaction is structured for one borrower at. We will learn the mathematics underlying financial structure and the governing. Bondlink provides municipal bond issuers with easytouse investor relations websites, custom roadshows and investor analytics to help drive demand for their bond sales. Dbc finance sizes and structures bond issues, calculates debt service, performs refunding analyses and is backed by the best support team in the business. Although municipal bonds are technically exempt from registration and other requirements of tia, the municipal bond industry has adopted the practice of having an indenture trustee as the bondholders representative. For example, if you are considering purchasing municipal securities that finance speculative projects. Financial guidance for states, counties, and nonprofits. Micromuni desktop application software calculations have been verified by. Typically, indenture trustees today are corporate trust departments of. Best in class 15c212, timeoftrade, suitability, surveillance, bestexecution and ma rule solutions. Fiscal strengthening and capital investment planning o step 2. Municipal bonds bear interest which is paid at either a fixed or variable rate, depending on the terms of the bond. Services offered for general obligation bond sales.
The course will center on a case study of an actual bond transaction that financed multiple new money construction and refunding projects. Municipal bond default rates vary considerably depending on a variety of factors, including the types of bonds issued and whether the ultimate obligor is a municipal entity or a non municipal entity i. Structured bonds are debt securities that feature individualized terms. Nov 28, 2018 incorporates flexible structuring to meet budget needs low rates resulting from taxexempt basis offers an alternative financing option without voter approval provides project financing including soft costs spreads out the cost of an asset over the useful life of that asset or project. As a first step in the bond sale process, wm financial strategies develops a financing plan that includes recommendations with respect to the maturity schedule, redemption provisions, designation and flow of funds for bond accounts, bond issue dates, bond payment dates, bond pricing and procedures for investment of funds. Voters must be provided with a tax rate statement upon the passing of any new bond which details the best possible estimate of the tax rate required. Dbc dominates debtstructuring software space bond buyer. The course will meet each day on march 12, 2017 from 12.