CDIAC Welcome and Opening Remarks

Transcription:

 Michael Ballinger (00:11):

Good morning. I'm Mike Ballinger, publisher of the Bond Buyer. My pleasure to welcome you to the CDIAC Pre-Conference Workshop. Pursuit of fair and Efficient Pricing. CDIAC has put together an outstanding program in addition to the excellent panels. Today, we're delighted that California State Treasurer of Fiona Mall will speak at the Bond Buyer Conference tomorrow. The Bond Buyer's Partnership with CDIAC is now in 23rd year, and both parties have benefited. As a result. CDIAC's reputation as a provider of educational programming has encouraged California issuers to attend the Bombay Annual California Conference. Took off the CDIAC pre-conference workshop. It's my pleasure to introduce Robert Berry, Treasurer. Fiona Ma appointed Roberts the position of executive director of CDIAC in January, 2020. Prior to his appointment and since joining CDIAC in late 2010, he served as Deputy Executive Director during a time of unprecedented upheaval from the COVID-19 pandemic. Robert led a team of achieved some very notable milestones, which included development and deployed the CDX data portal. One of the first natively developed cloud-based database projects in the state government. Launched a California Debt financing guide app, externally hosted cloud-based customized debt reference on the issuance and administration of debt in California, and ushered in a new era of CDIAC online education with deployment of an externally hosted learning management system known as the CDIAC educational portal. Please join me in a warm welcome for Robert Berry.

Robert Berry (01:54):

Thank you very much, Mike. Get this up a little bit. Yes. This is CDX 23rd pre-conference to the California Public Finance Conference, and we're very grateful to the Bond Buyer for our longstanding partnership that enables CDIAC to produce content in the pre-conference, directed specifically to the issuer community. Thank you again for including us in the 34th California Public Finance Conference. I think we have a terrific program this morning that's full of interesting and actionable content, and I think it'll be a great kickoff for the next three days. So good morning everyone. On behalf of CDIAC Chairperson Treasurer, Fiona Ma on our entire CDIAC team. Thank you all for joining us this morning for our pre-conference program. As Mike noted, the pursuit of fair and efficient pricing, the municipal securities market is often characterized as illiquid, opaque, costly, decentralized, and unfair. The sheer number and variety of issuers and securities, the decentralized over the counter market structure, the relative low trade volume and trade frequency of municipal bonds, poor quality, timeliness, and of disclosure, and the lack of pre and post-trade price transparency.

(03:03):

All of these factors among others are thought to contribute more or less to the lack of fairness and efficiency in the municipal market. And efficiency translates to risk and if unmitigated or undercompensated risk turns into costs as issuers, obviously this translates to higher financing costs that by some estimates is billions of dollars that every year that could be invested back into the very projects that you're financing or other budget priorities in your communities. Much has been done to try and address market inefficiencies. The municipal advisor rule and MSRB rules aimed to enhance the range and quality of information and advice available to issuers, reduce information asymmetry and lock the interests of issuers and their advisors together. MSRB and FINRA rules regarding pre and post trade price disclosure and best execution targeted at retail and secondary price volatility. The enhancement of Rule 15 C two 12 to among other things include financial obligations and the enforcement of disclosure responsibilities through the MCDC, advancement and technology in the public and private sector, including alternative trading systems and tools and platforms for price disclosure.

(04:19):

But when will we arrive at fair and efficient pricing? Is this a goal that has been forever aspirational in a pursuit never ending, perhaps and not expected given the market complexities? But I know at least one of our speakers this morning will present information that pricing efficiency is improving and markedly so. Yet at the same time, a recent study published last August from the MSRB on primary and recently issued municipal securities, which I assume most of you have taken the time to read, suggests that more progress needs to be made. So what else should be done in the pursuit of efficiency and fairness and what can issuers do in particular to achieve better pricing outcomes? There are a variety of suggestions and strategies recommended, a greater commitment to complete, accurate, understandable, and timely disclosure, both initial and continuing holding financing team members more accountable for high quality and more comprehensive and insightful advice utilizing retail order periods or other order priority to try and maneuver around market inefficiencies.

(05:23):

And then how about a commitment as issuers to a more rigorous evaluation of the appropriate sale method for your specific plan of finance. These are just a few of the strategies that our presenters will unpack and examine with you all this morning. We've assembled a variety of very experienced professionals that will address these ideas from the range of perspectives, including the perspective on academic, a regulator, underwriter, municipal advisor, and issuer as an issuer. Understanding the strategy as well as the perspective from which it originates. We'll put you in a better position to make more informed decisions about your issuance in the best interest of your constituents. We have a very full pre-conference agenda in our first session. From the academic perspective, an empirical examination of fair pricing, pricing, inequities, and measures issuers can take in response. Then session two will frame much of this morning's program with a discussion of the legal structure that forms the basis of an issuer's relationship with their finance team and expectations for equitable pricing outcomes.

(06:28):

Then we'll have about a 15 minute break after which we'll really hash the topic out some more. We have underwriters and advisors that will take up the topics presented before the break and provide insight on still others, other topics and strategies based on their broad experiences. Now, I know that many of you in the audience will have a lot to say about the topics discussed this morning, so I hope you'll channel some of that enthusiasm over to the two microphone stations and share your questions and experiences with us. We're really counting on your participation. We scheduled time at the end of each of the sessions for some q and a and comments. There is a slide deck for the pre-conference that is primarily the presentation of session one, so if you'd like to follow along, there are a few laptops, so if you'd like to follow along on your laptop or review the slides later, you can access the slides at CDX website or there's a QR code on this little flyer that's inside your program that you can get to after we conclude the program about 1230, we'll adjourn next door. I think it's rooms three through six, I believe for lunch Treasurer. Typically, it comes to the pre-conference luncheon. We'll not be able to join us this year. She'll be here tomorrow. But we'll hear a short update from Deputy Treasurer John Sheldon, whom I know many of very well. Then we'll wrap up in time to get you to the main conference.