McGuire Sponsel is an independent municipal advisory firm specializing in project debt financing, derivatives and related services for not-for-profit organizations. Many times before we start work with nonprofit clients, the Board, Finance Committee and executive staff will ask; what is a municipal advisor, why did the Dodd Frank Act create this role and why do we need one.
A municipal advisor is a qualified financial professional who gives nonprofits advice on financial deals like bond offerings or conventional bank debt. That person must be registered through the Securities and Exchange Commission (SEC) as a municipal advisor and cannot have any other interest in the deal. They now have a federal fiduciary duty to their clients and are held to professional qualification and business conduct standards.
The SEC Municipal Advisor rule requires that people who provide “advice” to a municipal entity or “obligated person” with respect to investment strategies register with the SEC if such advice relates to (i) the issuance of municipal securities, (ii) the investment of proceeds of municipal securities, or (iii) municipal derivatives. Under the rule, the term obligated persons includes traditional conduit borrowers such as, traditional 501(c)3’s, nonprofit healthcare providers and universities who are obligated to repay amounts borrowed through a municipal securities offering
McGuire Sponsel works closely with each client to tailor a financing solution that meets its unique needs and has extensive experience with:
- Interim and permanent financings
- Bank-based financings
- Capital markets-based financings including rated and non-rated fixed rate bonds
- Federal Programs, such as the Community Facilities Program offered through the USDA
- All forms of interest rate hedges and credit enhancement
Every year, executive directors, chief financial officers and boards of nonprofits must make major decisions balancing risk, cost and return. These leaders are constantly faced with decisions about how to fund their existing debt and ongoing capital requirements, both which can have a profound impact on financial stability and the ability to fulfil their nonprofits’ missions.
McGuire Sponsel can assist with evaluating the various means and methods of financing, developing a financing plan, preparing and evaluating RFP’s, the selection of lenders and investment banks and negotiating structure and terms. Having an independent and objective partner can help the cloudy look clear.