This Issuance Policy is intended as a guide for the Public Finance Authority (“PFA”) and for applicants. While PFA reserves the right, in its discretion, to approve exceptions, applicants should not expect any exceptions.
General Requirements – All Financings
- Approval by the city, county or local agency hosting the proposed project as required under the Internal Revenue Code and Wisconsin Statutes (if applicable).
- Standard indemnification with respect to the financing and the project provided by the applicant to PFA in the appropriate financing documents.
- Standard indemnification with respect to the issuance and sale of Bonds provided by the underwriter to PFA in the purchase contract.
- PFA’s Issuer Counsel shall conduct a review of the financing documents for consistency with PFA’s policies and form documents.
- PFA’s program manager shall conduct a review of the financing.
- If offering material or a disclosure document is required, it shall contain language that PFA takes no responsibility for the disclosures contained therein (except for information under the sections titled "THE AUTHORITY" and "LITIGATION" to the extent such information pertains to PFA);
- If offering material or a disclosure document is required, the applicant shall have its counsel deliver a 10b-5 opinion covering such document at closing. The contents of such opinion shall be to the satisfaction of PFA and its counsel.
Requirements for Financings Rated "BBB-" or Better
Financings rated "BBB-" through "AAA" by any 1 of the 4 rating agencies (S&P, Moody's, Fitch and Egan-Jones Ratings Company) will be subject to the requirements below.
- Bonds may be issued and sold through a public offering, private placement or limited public offering with appropriate disclosure or offering materials.
- Bonds may be issued in $5,000 or such other minimum denominations at the discretion of the applicant and approved by PFA.
Requirements for Financings Rated Below "BBB-" or Unrated
- Bonds may be sold to (a) purchasers that are "qualified institutional buyers" as generally defined under Rule 144A of the Securities Act of 1933 and/or Sophisticated Municipal Market Professionals (“SMMPs”) as generally defined under MSRB Rule D-15 who shall be required to furnish the Authority with a written representation, or satisfactory evidence, as to their status as qualified institutional buyers or SMMPs, and/or (b) purchasers that are “accredited investors” as generally defined under Regulation D of the Securities Act of 1933 and all initial accredited investors that are not qualified institutional buyers or SMMPs shall execute a sophisticated investor letter in form acceptable to PFA.
- The offering material/disclosure document, if any, shall prominently indicate on the cover that Bonds can only be sold to qualified institutional buyers, SMMPs, and/or accredited investors.
- The face of each Bond shall contain a legend stating to the effect that such Bond can only be sold or transferred to qualified institutional buyers, SMMPs, and/or accredited investors.
- The bond documents shall contain provisions that restrict the ability to transfer the Bonds to only qualified institutional buyers, SMMPs, and/or accredited investors.As an alternative to Items 1 through 4, above, Bonds may be issued in minimum denominations of $500,000 and the Bonds and bond documents shall contain provisions ensuring that the $500,000 minimum denomination will remain in effect for as long as the Bonds are unrated or rated below “BBB-”.
- Bonds may be issued and sold through a private placement or limited public offering with appropriate disclosure or offering materials, unless waived in the case of a private placement to a financial institution buyer that has performed underwriting/due diligence with respect to the applicant and the bonds.
- Bonds may be issued in $5,000 or such other minimum denominations at the discretion of the applicant and approved by the Authority; however, “accredited investors” shall be subject to a $25,000 minimum purchase requirement.
- Bonds shall be delivered in book-entry form, if delivered to a broker or dealer subject to MSRB Rule G-15, and otherwise shall be physically delivered.
Criteria for Asset Ownership (P3) Structure
- Sponsor would agree to include structural and document protections of PFA, set out in an outline prepared by Orrick Herrington & Sutcliffe based on its prior experience designing and implementing this structure. These protections will include (a) Disclaimers of contractual liability of any kind with respect to the bonds and all the other agreements to which PFA is a party, (b) Disclaimer of responsibility for information contained in any disclosure document (other than the “Authority” and “Litigation” sections), (c) Adequate indemnifications or Indenture provisions for the funding of accounts with enough revenues from the project to cover any expenses the PFA may incur for any reason (budgeted and unbudgeted), and (d) Delegation as much as possible to the Bond Trustee, the Manager or the Financial Consultant of any additional responsibilities PFA might otherwise have as a result of its ownership of the project.
- Orrick would be Bond Counsel, and in such capacity would report to the Board any material adverse deviations prior to authorization of bonds and documents by the Board.
- The PFA will engage Issuer Counsel to ensure the finance terms are consistent with typical PFA guidelines and real estate and general counsel to ensure the asset ownership provisions are consistent with the PFA guidelines.
- In the event a disclosure document is prepared, any opinion rendered by disclosure or underwriters counsel would also be addressed to PFA.
- In event of private placement or limited offering, an investor letter would be required in connection with the original sale in form satisfying #1 and #2 above.
- PFA would select an Insurance Consultant, and the insurance required with respect to the project would meet or exceed the recommendations of the Insurance Consultant.
- PFA would not select, but would review the qualifications and concur in the selection of, the Facilities Manager.
- PFA would engage a Financial Consultant to act as PFA’s fiduciary financial consultant on the transaction, and post-closing to oversee performance of the Facilities Manager, including formulation of budgets and approving disbursements, performing other tasks of the PFA as owner that are specified in accordance with #1 above, review post-issuance rebate and other tax and disclosure compliance, and report annually to the Board on the foregoing.
- PFA will, at its discretion, annually review the Insurance Consultant, Facilities Manager and Financial Consultant, and make any changes it deems appropriate, including replacement of any such party if it is in default or otherwise not performing satisfactorily, provided that PFA will not seek to change the Facilities Manager without concurrence of the Bond Trustee and any ground lessor, donee of the project or other holder of residential interests in the project, and subject to any conditions set out in the bond documents.
- The foregoing are in addition to the usual provisions and procedures the PFA applies to approving traditional conduit financings.
POST-ISSUANCE COMPLIANCE WRITTEN POLICIES
Please review PFA's Post-Issuance Compliance Written Policies for: