A LETTER FROM THE DEPARTMENT CHAIR
Thomas A. Wilson | Columbus, OH
2015 saw interest rates continue to stay low, which allowed many borrowers to refund outstanding bond issues to realize debt service savings. With many predicting interest rates to rise in 2016, future refunding opportunities may be limited. The year also saw an increase in “new money” projects, particularly in the healthcare area. Banks continued to have a strong appetite for purchasing tax-exempt debt for their investment portfolios in 2015.
Perhaps the most unique and significant development in the municipal market was the Securities and Exchange Commission’s Municipalities Continuing Disclosure Cooperation Initiative (MCDC Initiative). This program gave both underwriters and obligated persons (governmental issuers and borrowers) the opportunity to obtain favorable settlement terms if they self-reported to the SEC possible violations involving materially inaccurate statements relating to prior compliance with the continuing disclosure obligations specified in Rule 15c2-12 under the Securities Exchange Act of 1934. With the SEC announcing the first penalties for underwriters under the MCDC initiative, focus continued to be on accurate disclosure and continuing disclosure compliance. Additional sanctions for underwriters are expected, and the market is waiting for the SEC to announce penalties for non-compliant issuers and borrowers in 2016.
While 2014 saw the conclusion of the Detroit bankruptcy case, the nation’s largest municipal bankruptcy to date, other cities, including Hillview, Kentucky, filed for bankruptcy protection in 2015. The year also saw the financial problems in Puerto Rico and pension shortfalls in Illinois and elsewhere make headlines. Such conditions continue to concern the market and increase focus on an issuer’s fiscal health and financial practices.
Whether you’re looking at financing projects or need other legal advice, we have the experience to assist you with all types of transactions, big or small, to take advantage of the benefits of tax-exempt financing. With the firm’s expansion into Michigan and California, we’re looking to expand our practice to assist our national banking and underwriting clients and issuers in those states in 2016.