CHICAGO – Investment banking firms have until Dec. 22 to submit their qualifications to Wisconsin as the state prepares new underwriting and dealer pools for negotiated sales under its various bond programs.
"The RFQ is a standard review of qualifications of firms interested in providing investment banking and/or dealer services to the state of Wisconsin," said Capital Finance Director David Erdman. "The questions reflect a mix of quantitative services, underwriting ideas, and current events in the municipal market."
The senior and co-manager pools will be used by the state until the end of 2017.
The state uses a mix of negotiated and competitive sales to access the bond market.
The Request for Qualifications seeks input as the state looks to update its investor relations, including potential changes to the capital finance website. It asks for input on how the state should reach out to investors who have not previously purchased Wisconsin paper or don't currently hold its bonds.
The state hosted investor conferences which were attended by Gov. Scott Walker in Milwaukee and New York in 2014 and asks for suggestions on the timing of future conferences and "any structuring or marketing ideas you may have to improve the general market reception of the state's credits."
Guidance on pricing and compliance is also sought as part of the RFI in light of proposed regulations relating to issue price determination, combined with continued requirements and obligations on underwriters to ensure issuers are in compliance with continuing disclosure undertakings.
The state says it is concerned over the "negative impacts on the future use of competitive sales" due to those latest developments and asks what steps it can take "to assist underwriters in these areas to ensure that competitive sales remain a viable option in the future."
The committee that reviews the proposals assigns a score with 15% based on financial capacity, 10% distribution strength, 40% technical abilities & qualifications, 20% for state commitment and experience, and 15% for relevant senior manager/co-manager/dealer experience.
In other state related borrowing news, the state Building Commission approved at a recent meeting a $355 million new money authorization that includes $220 million of issuance for transportation projects.
It also reauthorized $450 million of general obligation bond refunding authority that was set to expire in January, Erdman said.
The new money includes a portion of borrowing authorization freed up by the legislature's Joint Finance Committee at Walker's request for transportation projects that otherwise faced delay.
A preliminary authorization for the contingent borrowing was included the fiscal 2016-2017 biennial budget but Joint Finance approval was needed to allow for the issuance. The authorization allows for $200 million to be tapped this year and $150 million in the next fiscal year.
Wisconsin recently wrapped up a transportation revenue bond sale and its first sale under a new environmental improvement fund revenue bond credit.
The state also continues to work on a roughly $200 million sale that would be issued through the Wisconsin Center District Board to help fund a new arena for the National Basketball Association's Milwaukee Bucks. Morgan Stanley is lead investment banker and Robert W. Baird & Co. is advising on the transaction.
Fitch Ratings, Standard & Poor's and the Kroll Bond Ratings Agency all rate Wisconsin GOs AA; Moody's rates them Aa2. Moody's has a positive outlook; the others assign a stable outlook.
