The National Federation of municipal Analysts recently set up a program to recognize municipal bond issuers that meet, and continue to meet, high standards of disclosure. In the following letter, Robert W. Doty, chair of the NFMA's Certificate Committee, discusses the program and lists recipients of the group's Certificate of Recognition for continuing disclosure.
The National Federation of Municipal Analysts is pleased to honor the recipients of the Federation's Certificate of Recognition. The Certificate of Recognition is granted to those state and local government securities issuers who have evidenced a commitment to continuing disclosure.
Continuing disclosure is vital for the efficiency of the municipal securities market. Many municipal securities are illiquid; when their investors seek to sell them, a pricing discount occurs due to the absence of adequate information. Investors often must go to great lengths to obtain information even on bonds they already own. The Certificate of Recognition Program targets these and other inefficiencies. NFMA believes that, by identifying cooperative issuers, it will be able to highlight the positive issuers in the market. NFMA recognizes that there are many, many cooperative issuers who deserve to be recognized; we ask only that they identify themselves to us by contacting Deborah A. Doty, Program Administrator, 2500 Marconi Avenue, Suite 202, Sacramento, CA 9582 1, telephone (916) 974-7910, fax (916) 482-3291.
NFMA's Certificate of Recognition Program is new, but has proven to be highly successful in identifying cooperative municipal securities issuers. Although in its infancy, the Program now has over 80 awardees. These cooperative issuers cover a broad range of credits and geographic regions from the State of Florida to the Municipality of Anchorage, Alaska, the Louisiana Public Facilities Authority and the City of Euless, Texas, to the City of Chicago. and the Sanitation Districts of Orange County, California, to the Massachusetts Water Resources Authority. In terms of their commitment to market improvements and their investors, the Certificate recipients are among the cream of the crop. The issuers recognized through May 1, 1993 are:
State of California (G.O. securities)
State of Florida
State of Louisiana
State of Minnesota
State of Washington
Florida Department of
Transportation
Florida Municipal Power Agency
Intermountain Power Agency
Kentucky Housing Corporation
Louisiana Public Facilities Authority
Massachusetts Muni. Wholesale Elec. Co.
Massachusetts Water Resources Authority
Minnesota Housing Finance Agency
Municipal Electric Authority of Georgia
New Mexico Mortgage Finance Authority
Power Authority of the State of New York
North Carolina Eastern Muni. Power Agency
North Carolina Muni. Power Agency No. 1
Port Authority of New York and New Jersey (General obligation securities)
South Dakota Housing Development Authority
Wyoming Community Development Authority
City of Akron, OH
Municipality of Anchorage, AK
Anchorage (AK) Municipal Light & Power
Anchorage (AK) Parking Authority
Anchorage (AK) Telephone Utility.
City of Antioch. CA
Bakersfield (CA) Memorial Hospital
County of Broward, FL
Village of Buffalo Grove, IL
CGH Med. Ctr. (Sterling, IL)
City of Chicago, IL (Except private activity securities)
City of Cleveland, OH
City of Euless, TX
County of Forsyth, NC
City of Fort Worth, TX
City of Gardner, KS
Grand River Dam Authority
City of Grass Valley, CA
County of Greene, OH
County of Harford, MD
Houd County (TX) Hospital District (Hood General Hospital)
Jacksonville (FL) Electric Authority
City of Ketchikan, AK
City of Kirkland, WA
City of Leawood, KS
City of Lenexa, KS
County of Los Angeles, CA
Los Angeles (CA) Dept. of Water and Power
Lower Colorado River Authority (TX)
Metropolitan Transportation Authority (NY)
Town of Milford, CT
Minneapolis Community Devel. Agency
County of Nevada, CA
Omaha Public Power District
County of Orange, FL
Orange County, CA Sanitation Districts
Greater Orlando (FL) Aviation Authority
City of Overland Park, KS
City of Philadelphia, PA (G.O. securities)
Philadelphia Gas Works
Philadelphia Water Department
Piedmont (SC) Municipal Power Agency
City of Pittsburg, KS
Prince William County (VA) Park Authority
County of Richland, SC
City of Rock Hill, SC
Sacramento Municipal Utility District
City of Salina, KS
City of Sandy City, UT
Saratoga (MI) Commun. Hosp. Obligated Grp.
Sisters of Charity Health Care Systems, Inc. Obligated Group
Sunnyvale (CA) Financing Authority
City of Tallahassee, FL
Triborough Bridge and Tunnel Authority (NY)
Tualatin Valley (OR) Fire and Rescue
City of Virginia Besch, VA
Metro. Washington (DC) Airports Authority
County of Wood, OH
County of Wyandotte, KS
[More to come.] In a recent NFMA survey, two-thirds of the respondents representing institutional investors stated that they always or frequently reject securities of, or require additional yield from, noncooperative issuers. The foregoing issuers have the comfort of a more positive market reception.
The award of Certificates of Recognition is based on information and representations obtained from state and local government securities issuers or their officials or representatives as to certain continuing or periodic disclosure procedures followed by those issuers, which information and representations the National Federal of Municipal Analysts believes to be reliable. The Federation does not, however, guarantee the accuracy of the information or representations so received by it. Neither the award of a Certificate of Recognition nor any listing of Certificate recipients constitutes a solicitation of the purchase or sale of any securities. Certificates 6f Recognition do not relate in any way to the accuracy or adequacy of the content of any disclosure by any issuer.
Awards of Certificates of Recognition are made based upon resolutions, ordinances, official statements, letters, other documents, or demonstrations of established practices indicating a commitment to provide (a) audited financial statements and (b) certain other pertinent credit information (as determined by the issuer) relevant to an issuer's outstanding securities, or specified categories of those securities. The information is to be provided (i) upon request; (ii) to one or more major information providers in the state and local government securities market; and (iii) to nationally-recognized rating services (if any) rating the securities. NFMA requests that it be notified of problems in these regards. Certain charges for information may apply.
Yours very truly,
Robert W. Doty
Chair, NFMA Certificate Committee
