Debt Advisory Services

SCM provides a full range of debt advisory services to clients in need of advice regarding the issuance of tax-exempt or taxable bonds. Services may include helping the issuer to establish a financing plan, structure the bonds, select working group members (underwriter, bond counsel, trustee, bond insurer, etc.), develop and review bond and disclosure documents, obtain credit rating of bonds, and coordinate pricing and closing of bonds.

Scope of Services

Step 1: Establish the Financing Plan

SCM works with the issuer to determine the most appropriate method of sale: competitive, negotiated, or private placement. We help the issuer select an underwriter, trustee, bond counsel, and other finance team members as needed. Once the working group has been established, we hold an organizational meeting to lay out the basic financing plan and timetable and to establish each party’s roles, responsibilities and tasks.

Step 2: Determine Bond Structure

With input from the issuer (and underwriter, if negotiated) SCM models the debt using a variety of scenarios (fixed, variable, or a combination) according to the issuer's specifications. As part of this process, we determine the issuer's hedging goals, if applicable, and analyze the effectiveness and desirability of various credit enhancement strategies. At this stage, we may interact with the rating agencies to assess the potential impact of various structures on an issuer's credit rating. Potential bond and derivative structures are discussed with the client and evaluated to determine the best approach given the client's goals.

Step 3: Educate Rating Analysts and/or Credit Enhancers

SCM works with the issuer to develop a detailed strategy for highlighting key credit strengths and addressing possible areas of concern. We prepare a thorough credit presentation and submit it to the rating agency and/or credit enhancement provider in advance of the scheduled meeting. We participate in rating calls and help the issuer present the credit to the analysts.

Step 4: Documentation

SCM thoroughly reviews all draft financing documents, including the sale resolution, and the preliminary official statement before distribution.

Step 5: Sale

SCM monitors the market for major economic indicators or other bond sales that may impact the issuer's pricing, timing the sale of the bonds around these events to the issuer's best advantage. We conduct a pre-pricing discussion to update the issuer on market conditions leading into the pricing period. We then hold a pricing call with the underwriter and issuer, present comparables to the underwriter as a basis for negotiation, and react and respond to last minute pricing issues.

Step 6: Closing

After the sale of the bonds, SCM reviews the final official statement and all legal documents to ensure accuracy and completeness. We work with bond counsel to ensure all regulatory documentation is filed, and assist in the closing process as needed. We also prepare a post-sale analysis of the transaction.

Private Placements

Occasionally, an issuer may have difficulty accessing the tax-exempt or taxable market, whether because of market conditions, size of the issue, or credit concerns.  When these complications arise, a private placement of the debt may be the solution.  SCM has established contacts throughout a network of more than 800 banks who regularly invest in real estate backed institutional debt.  We work with the issuer to prepare a private placement memorandum and present the credit to a number of appropriate banks, then negotiate with the bank best suited to meet the issuer's financing needs.