WASHINGTON — Three hours after Standard & Poor’s announced that it had downgraded Assured Guaranty Ltd.’s two insurer platforms to AA-plus from AAA, 84 material-event notices had been filed with the Municipal Securities Rulemaking Board’s online EMMA system disclosing 181 bond issues affected by the rating downgrades.
However, virtually all of the notices were filed by Digital Assurance Corp. on behalf of issuers that subscribe to its disclosure services, with one exception. Sacramento County was the only issuer to file material event notices during the three hours.
The county filed a notice at 12:28 Eastern Standard Time disclosing the downgrades for nine of its airport system revenue bond issues. At 12:34 it filed another notice on the downgrades for a pension bond issue.
Informed that she was the only issuer to file material event notices during the three hours, Chris Marx, the county’s debt manager, said: “For gosh sakes, give them time,” referring to other issuers.
Marx, who did not want the publicity, said she was having a slow day and was alerted to the downgrades by the county’s financial adviser, Public Financial Management Inc., and its underwriter, Morgan Stanley.
“I’ve been doing this for two years, filing these as soon as they come out,” Marx said. “But I just did it because I’m supposed to and others take care of me, too,” she added, referring to PFM and Morgan Stanley.
By 5:27, about 172 material-event notices on rating changes had been filed, most of them on the Assured Guaranty downgrade.
They included many more from DAC, but also some from other disclosure agents, such as Southwest Securities Inc., and a few more issuers, including Belleville, Ill., and the Nebraska Public Power District.
The Securities and Exchange Commission’s Rule 15c2-12 only requires issuers to file material event notices on a “timely basis.” Beginning Dec. 1, changes to the rule will give issuers up to 10 days to file event notices.
