using emma to find great stories by ernesto lanza and justin pica

emma.msrb.org

EMMA – Electronic Municipal Market Access The Official Source for Municipal Disclosures and Market Data

The Municipal Securities Rulemaking Board and the Donald W. Reynolds National Center for Business Journalism March 27, 2012

Using EMMA® to Find Great Stories in Municipal Bonds

What Kinds of Stories Have Been Written Using the EMMA Website?

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Poll – EMMA Usage

n  How often have you consulted EMMA? q Never q Once q 2-5 times q More than 5 times

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Poll – Reporter Beats

n  Which beat(s) do you cover? Pick all that apply. q Business q Government q Education q Health care q General assignment q Features, including the arts q Sports q Other beats q  I'm not a reporter

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Webinar Objectives

n  What is the EMMA website and how does it act as a tool for journalists?

n  What information is available on EMMA that can help journalists report their stories?

n  How do journalists use the EMMA website to find information?

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What Is the Municipal Securities Rulemaking Board?

n  National regulator for the municipal market n  Mission to protect:

n  Investors n  Issuers of municipal securities n  Entities whose credit stands behind municipal securities n  Public pension plans

n  The MSRB makes municipal market information as transparent and widely available as possible n  Created and operates the Electronic Municipal Market

Access (EMMA®) website

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http://www.msrb.org/

What Is a Municipal Bond?

n  Type of debt security issued by a state, municipality or county to finance its capital expenditures

n  Exempt from federal taxes and from most state and local taxes, especially if the bond holder lives in the state in which the bond is issued

n  Capital expenditures include: n  Highways n  Bridges n  Schools n  Parks

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What Is the EMMA Website?

n  The MSRB’s Electronic Municipal Market Access (EMMA) website

n  Provides access to municipal bond data and disclosures

n  All information is available free of charge

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http://emma.msrb.org/

What Information Is Available on EMMA?

n  Investors, other market participants and the general public have unlimited access to: n  Municipal bond offering documents n  Continuing disclosure documents n  Trade prices n  Interest rates

n  Enables investors to better understand certain elements of a particular security: n  Terms n  Characteristics n  Risks

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How Can the EMMA Website Help Journalists?

n  EMMA contains documents prepared by state and local governments

n  These documents typically are not readily available elsewhere

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How Can the EMMA Website Help Journalists?

n  Documents contain information about a municipality, its financial condition and its infrastructure projects n  Projects financed with municipal bonds

n  Information which helps reporters understand the local economy, development and politics

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How Do Journalists Use the EMMA Website to Find this Information?

n  Basic municipal bond search n  Limited functionality n  Significant amount of information to sift through

n  To perform basic search, use one of the following: n  Issuer’s name n  State of the issue n  CUSIP of bond or issuer

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What Is a CUSIP Number?

n  Unique identification code n  CUSIP-9

n  Assigned to each maturity of a bond issue

n  Can be obtained from bond underwriter

n  CUSIP-6 n  Identifies a particular bond

issuer

n  Located on the official statement of a bond issue

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Search the EMMA Website Using a CUSIP Number

n  A source slipped you a copy of a municipal bond disclosure document and said you should look into the bond. You found the bond’s CUSIP number on the document and go to the EMMA website for more information.

n  VIDEO: Search using a CUSIP number

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Advanced Search

n  Advanced search option n  Issue description n  State n  Maturity date

n  Date of issuance n  Interest rate n  Coupon rate

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Search the EMMA Website Using Advanced Search

n  You overheard some local officials discussing a recent bond issue that will fund a public works facility. Knowing the state of issuance and description of the issue, you go to the EMMA website to get more information on the bond.

n  VIDEO: Search using advanced search

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Quiz – Searching on EMMA

n  What does a CUSIP-6 identify? q A bond issue q A 529 plan q A bond issuer q A municipality q A bond lawyer

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Questions?

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What Is an Official Statement?

n  Document prepared in connection with a new issue of municipal securities

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What Is an Official Statement?

n  Describes the essential terms of the bond n  Terms of the bond n  Bond features n  Key financial and operating data n  Repayment obligations

n  Can apply to multiple issues of a particular bond emma.msrb.org | 22

How Is an Official Statement Helpful to a Reporter?

n  Ashtabula Area City School District, Ohio General Obligation School Improvement Refunding Bonds

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n  Ashtabula Area City School District, Ohio General Obligation School Improvement Refunding Bonds n  School enrollment and testing proficiency levels n  Education of teaching staff n  Description and value of school facilities n  Retirement expenses for teaching staff

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http://emma.msrb.org/ER548130-ER424930-ER827047.pdf


n  Ashtabula Area City School District, Ohio General Obligation School Improvement Refunding Bonds n  Timing and amount of revenues n  Economic and demographic information n  Local economy data n  School district debt/long-term obligations

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n  Miami-Dade County, Florida General Obligation Refunding Bonds (Parks Program)

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n  Miami-Dade County, Florida General Obligation Refunding Bonds (Parks Program) n  “Building Better Communities” program information n  County services and functions n  Largest taxpayers n  Pending litigation

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n  Miami-Dade County, Florida General Obligation Refunding Bonds (Parks Program) n  Market value of all property n  Employment data n  Tourism statistics n  Impact of local film industry

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http://bit.ly/GEiry4


n  You know that the city involved in a big upcoming municipal bond offering recently laid off some of its government employees. You’re interested in the overall financial picture of the city, so you look through the official statement for the bond issue.

n  VIDEO: Finding newsworthy parts of an official statement

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What Are Continuing Disclosure Documents?

n  Contain important information that arises after the initial issuance of a municipal bond n  Reflects the financial or operating conditions of an issuer

over time n  Specific events that occur after issuance

n  Continuing Disclosure Agreement n  Describes the type of events about the bond that be

disclosed

n  The EMMA website contains both voluntary and required continuing disclosure documents

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Types of Continuing Disclosure Documents

n  Rule 15c2-12 of the Securities Exchange Act of 1934 requires certain information be provided to the EMMA system: n  Financial or operational information

§  Annual financial information §  Audited financial statements

n  Event Notices §  Principal and interest payment delinquencies §  Rating changes §  Bankruptcy, insolvency or receivership §  Merger, consolidation or acquisition

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Types of Continuing Disclosure Documents

n  Some issuers and obligated persons provide additional information after initial issuance n  Contractual arrangement n  Matter of practice

n  Types of additional information: n  Additional financial or operating information

§  Accounting standard §  Budget data §  Consultant reports

n  Additional event-based disclosures §  Change in obligated person or agent §  IRS communications §  Bid for auction rate or other securities

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Finding Continuing Disclosure Documents on the EMMA Website

n  You heard on the news that Moody’s just downgraded the bond issues of municipalities across the country. You’re interested in whether your city was one of those downgraded. You go to EMMA and look for a continuing disclosure document to this effect.

n  VIDEO: Finding continuing disclosure documents

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Quiz – Disclosures

n  Which of the following information is found in continuing disclosure documents on the EMMA website?

q Audited financial statements for the issuer q Bankruptcy of the issuer q Credit-rating downgrade for the issuer q Communications from the IRS related to bonds’ tax-

exempt status q All of the above

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Questions?

What Is a Municipal Bond’s Credit Rating?

n  A bond’s credit rating is an opinion about its risk of default

n  Ratings can be issued at the time of issuance or anytime over the life of the bond

n  Can be changed or withdrawn at any time

n  The EMMA website displays current long-term ratings and underlying or unenhanced ratings n  Fitch Ratings n  Standard and Poor’s emma.msrb.org | 36

Credit Ratings on the EMMA Website

n  You’re writing a story on bond issuance throughout the State of North Carolina, and are curious as to which municipalities have the highest credit ratings for their bonds. You use the Credit Ratings Search function on the EMMA website to get a broad idea of this information.

n  VIDEO: Finding credit ratings

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EMMA Alerts

n  Available for any security listed on the EMMA website n  Email notification sent when a new document is submitted

for that particular bond

n  Keep apprised of newsworthy material information n  Downgrade of municipal bond n  Municipality bankruptcy

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http://dataport.emma.msrb.org/MarketActivity/ManageAlerts.aspx

Additional Videos on EMMA on BusinessJournalism.org

In addition to the videos in the webinar today, you can find these short videos at http://bit.ly/EMMA2012:

n  Finding credit ratings n  Signing up for email alerts about a bond issue n  Analyzing the first page of bonds’ official statements n  Finding lawsuits affecting bond issuers n  Finding recent trades and prices n  Searching for bond defaults n  Tracking IRS audits involving bonds’ tax-exempt

status emma.msrb.org | 39

Political Contributions – MSRB Rule G-37

n  Maintains the integrity of the municipal securities market and prevents pay-to-play practices

n  Bans municipal securities dealers from engaging in municipal securities business after they have made contributions to issuer officials

n  Search for political contribution disclosures on MSRB.org: http://www.msrb.org/msrb1/pcocweb/search/search.asp

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EMMA Education Center

n  Contains educational resources for municipal bond investors and users of the EMMA website n  Videos n  Glossary of municipal bond

terms n  Frequently asked questions

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http://emma.msrb.org/EducationCenter/EducationCenter.aspx

EMMA Mobile

n  Mobile-friendly version of the EMMA website that optimizes certain elements of the site for mobile display

n  http://emma.msrb.org/ n  Direct access and improved navigation to:

n  Municipal bond trade prices n  Search functions n  Market statistics

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Contact Information

n  Ernesto Lanza n  [email protected] n  (703) 797-6720

n  Justin Pica n  [email protected] n  (703) 797-6716

n  MSRB Main Number n  (703) 797-6600

n  Sign up to receive emailed news releases: https://public.govdelivery.com/accounts/VAORGMSRB/subscriber/new

n  Follow us on Twitter: http://twitter.com/#!/MSRB_News emma.msrb.org | 43

What You Learned

n  Stories written using the EMMA website n  Information available on the EMMA website n  How the EMMA website can help journalists n  How to search the EMMA website to find

information n  Types of municipal bond documents and how they

can be used n  Additional features on the EMMA website

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Tomorrow’s Session – Noon and 4 p.m. ET

n  Yamil Berard of the Fort Worth Star-Telegram n  High rate of default for a particular type of muni called

conduit bonds for Tarrant County

n  Lynn Hume of the Bond Buyer n  IRS investigations into community development districts

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Homework Tonight

n  You will be able to download the three-question homework assignment from the next screen.

n  Email your answers to [email protected]

by 11:59 p.m. PT March 28. n  Those who answer correctly will be entered into a

drawing for a $10 Starbucks gift card. n  A video showing how to find the answers will be

available at http://bit.ly/EMMA2012

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Questions?

emma.msrb.org

EMMA – Electronic Municipal Market Access The Official Source for Municipal Disclosures and Market Data

The Municipal Securities Rulemaking Board and the Donald W. Reynolds National Center for Business Journalism March 27, 2012

Using EMMA® to Find Great Stories in Municipal Bonds

using emma to find great stories by ernesto lanza and justin pica

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