Colin MacNaught, the former Massachusetts assistant treasurer, on Monday launched
"We're going to provide tools to help issuers like governments, authorities, and nonprofits issue their bonds more efficiently," said MacNaught, who was responsible for issuing close to $25 billion in bonds and notes for more than seven years at Massachusetts Treasury.
"As a former issuer, I have a good sense of where technology can help the most."
The Boston-based company's other co-founder is chief technology officer Carl Query, who founded vacation-rental website FlipKey. TripAdvisor acquired a majority share of FlipKey in 2008.
BondLink's first product is a turnkey investor relations platform that aims to help issuers communicate with investors and enhance their regulatory compliance.
"Disclosure is a major focus for market participants and that's where BondLink will help," said MacNaught, noted for his Massachusetts disclosure initiatives.
Calls for improved disclosure resonate in the municipal sphere, notably from bond investors and regulators including the Securities and Exchange Commission.
"From their perspective, disclosure can be limited," said MacNaught. "It often lacks timeliness, and it lacks comparability. We want to address all three of those issues."
The company, he said, is building out a sales force and technology team at its Fort Point headquarters near South Station. Data testing over the past six weeks has gone well, according to MacNaught.
Issuers, he said, will include cities, states, utilities and universities nationwide.
"There's no technology company set up exclusively for municipal bond issuers," MacNaught said. "We want to be that resource because we know it's difficult to be an issuer. I enjoyed working with other issuers in organizations such as the GFOA and NAST," he said, citing the Government Finance Officers Association and the National Association of State Treasurers.
"I think I have a good feel for what issuers need and where technology can help the most."
With MacNaught running point under then-treasurer Steven Grossman, the Massachusetts debt program won two Bond Buyer national Deal of the Year awards: the accelerated bridge program in 2011 and MassDirect notes in 2014. The commonwealth also received the 2013 Industry Contribution Award from the National Federation of Municipal Analysts for its investor relations website.
In addition, Massachusetts became the first state to sell bonds using an electronic trading platform, and the first issuer in the muni market to sell green bonds. It also launched a mobile app and hosted an annual investor conference.
Alan Schankel, a managing director at Janney Capital Markets in Philadelphia, said meeting disclosure requirements is especially challenging for smaller issuers.
"I think the challenge for issuers in terms of meeting disclosure requirements is directly related to size and resources," he said. "The smaller the issuer, the tougher it is. Number one, there's a lack of expertise and number two, a shortage of personnel.
"Trickling down to the smaller issuers, it's more of a challenge. For example, if a rating changes, the rating agency will tell the issuer, but the word might not get down to the person responsible for disclosure. Instead it might go to the superintendent of schools."
In a best-practices advisory last September, GFOA said making disclosure information more accessible "will help improve the efficiency of the municipal market and can possibly lower borrowing costs by improving access to information relevant to determining the credit quality of an issuer's bonds."
