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Using EMMA to Find Great Stories by Ernesto Lanza and Justin Pica

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Ernesto Lanza and Justin Pica of the Municipal Securities Rulemaking Board provide tips and techniques for finding great local stories on municipal bonds through the Electronic Municipal Markets …

Ernesto Lanza and Justin Pica of the Municipal Securities Rulemaking Board provide tips and techniques for finding great local stories on municipal bonds through the Electronic Municipal Markets Access database.

For more information about free training for business journalists, please visit businessjournalism.org.


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  • 1. EMMA – Electronic Municipal Market Access The Official Source for Municipal Disclosures and Market DataUsing EMMA® to Find Great Storiesin Municipal BondsThe Municipal Securities Rulemaking Board and theDonald W. Reynolds National Center for Business JournalismMarch 27, 2012 emma.msrb.org
  • 2. What Kinds of Stories Have Been WrittenUsing the EMMA Website? http://buswk.co/wM6lVQ emma.msrb.org | 2
  • 3. What Kinds of Stories Have Been WrittenUsing the EMMA Website? http://bit.ly/GDLypK emma.msrb.org | 3
  • 4. What Kinds of Stories Have Been WrittenUsing the EMMA Website? http://bit.ly/GDNTi8 emma.msrb.org | 4
  • 5. Poll – EMMA Usagen  How often have you consulted EMMA? q Never q Once q 2-5 times q More than 5 times emma.msrb.org | 5
  • 6. Poll – Reporter Beatsn  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 Im not a reporter emma.msrb.org | 6
  • 7. Webinar Objectivesn  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? emma.msrb.org | 7
  • 8. What Is the Municipal SecuritiesRulemaking Board?n  National regulator for the municipal marketn  Mission to protect: n  Investors n  Issuers of municipal securities n  Entities whose credit stands behind municipal securities n  Public pension plansn  The MSRB makes municipal market information as transparent and widely available as possible n  Created and operates the Electronic Municipal Market Access (EMMA®) website http://www.msrb.org/ emma.msrb.org | 8
  • 9. What Is a Municipal Bond?n  Type of debt security issued by a state, municipality or county to finance its capital expendituresn  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 issuedn  Capital expenditures include: n  Highways n  Bridges n  Schools n  Parks emma.msrb.org | 9
  • 10. What Is the EMMA Website?n  The MSRB’s Electronic Municipal Market Access (EMMA) websiten  Provides access to municipal bond data and disclosuresn  All information is available free of charge http://emma.msrb.org/ emma.msrb.org | 10
  • 11. 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 ratesn  Enables investors to better understand certain elements of a particular security: n  Terms n  Characteristics n  Risks emma.msrb.org | 11
  • 12. 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 emma.msrb.org | 12
  • 13. 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 emma.msrb.org | 13
  • 14. How Do Journalists Use the EMMAWebsite to Find this Information?n  Basic municipal bond search n  Limited functionality n  Significant amount of information to sift throughn  To perform basic search, use one of the following: n  Issuer’s name n  State of the issue n  CUSIP of bond or issuer emma.msrb.org | 14
  • 15. What Is a CUSIP Number?n  Unique identification coden  CUSIP-9 n  Assigned to each maturity of a bond issue n  Can be obtained from bond underwritern  CUSIP-6 n  Identifies a particular bond issuern  Located on the official statement of a bond issue emma.msrb.org | 15
  • 16. Search the EMMA Website Using aCUSIP Numbern  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 emma.msrb.org | 16
  • 17. Advanced Searchn  Advanced search option n  Issue description n  Date of issuance n  State n  Interest rate n  Maturity date n  Coupon rate emma.msrb.org | 17
  • 18. Search the EMMA Website UsingAdvanced Searchn  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 emma.msrb.org | 18
  • 19. Quiz – Searching on EMMAn  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 emma.msrb.org | 19
  • 20. Questions? emma.msrb.org | 20
  • 21. What Is an Official Statement?n  Document prepared in connection with a new issue of municipal securities emma.msrb.org | 21
  • 22. 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 obligationsn  Can apply to multiple issues of a particular bond emma.msrb.org | 22
  • 23. How Is an Official Statement Helpful to aReporter?n  Ashtabula Area City School District, Ohio General Obligation School Improvement Refunding Bonds emma.msrb.org | 23
  • 24. How Is an Official Statement Helpful to aReporter?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 staffhttp://emma.msrb.org/ER548130-ER424930-ER827047.pdf emma.msrb.org | 24
  • 25. How Is an Official Statement Helpful to aReporter?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 emma.msrb.org | 25
  • 26. How Is an Official Statement Helpful to aReporter?n  Miami-Dade County, Florida General Obligation Refunding Bonds (Parks Program) emma.msrb.org | 26
  • 27. How Is an Official Statement Helpful to aReporter?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 emma.msrb.org | 27
  • 28. How Is an Official Statement Helpful to aReporter?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 industryhttp://bit.ly/GEiry4 emma.msrb.org | 28
  • 29. How Is an Official Statement Helpful to aReporter?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 emma.msrb.org | 29
  • 30. What Are Continuing DisclosureDocuments?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 issuancen  Continuing Disclosure Agreement n  Describes the type of events about the bond that be disclosedn  The EMMA website contains both voluntary and required continuing disclosure documents emma.msrb.org | 30
  • 31. Types of Continuing Disclosure Documentsn  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 emma.msrb.org | 31
  • 32. Types of Continuing Disclosure Documentsn  Some issuers and obligated persons provide additional information after initial issuance n  Contractual arrangement n  Matter of practicen  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 emma.msrb.org | 32
  • 33. Finding Continuing Disclosure Documentson the EMMA Websiten  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 emma.msrb.org | 33
  • 34. Quiz – Disclosuresn  Which of the following information is found in continuing disclosure documents on the EMMA website?q Audited financial statements for the issuerq Bankruptcy of the issuerq Credit-rating downgrade for the issuerq Communications from the IRS related to bonds’ tax- exempt statusq All of the above emma.msrb.org | 34
  • 35. Questions? emma.msrb.org | 35
  • 36. What Is a Municipal Bond’s Credit Rating?n  A bond’s credit rating is an opinion about its risk of defaultn  Ratings can be issued at the time of issuance or anytime over the life of the bondn  Can be changed or withdrawn at any timen  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
  • 37. Credit Ratings on the EMMA Websiten  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 emma.msrb.org | 37
  • 38. 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 bankruptcyhttp://dataport.emma.msrb.org/MarketActivity/ManageAlerts.aspx emma.msrb.org | 38
  • 39. Additional Videos on EMMA onBusinessJournalism.orgIn addition to the videos in the webinar today, you can find these short videos at http://bit.ly/EMMA2012:n  Finding credit ratingsn  Signing up for email alerts about a bond issuen  Analyzing the first page of bonds’ official statementsn  Finding lawsuits affecting bond issuersn  Finding recent trades and pricesn  Searching for bond defaultsn  Tracking IRS audits involving bonds’ tax-exempt status emma.msrb.org | 39
  • 40. Political Contributions – MSRB Rule G-37n  Maintains the integrity of the municipal securities market and prevents pay-to-play practicesn  Bans municipal securities dealers from engaging in municipal securities business after they have made contributions to issuer officialsn  Search for political contribution disclosures on MSRB.org: http://www.msrb.org/msrb1/pcocweb/search/ search.asp emma.msrb.org | 40
  • 41. 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 questionshttp://emma.msrb.org/EducationCenter/EducationCenter.aspx emma.msrb.org | 41
  • 42. EMMA Mobilen  Mobile-friendly version of the EMMA website that optimizes certain elements of the site for mobile displayn  http://emma.msrb.org/n  Direct access and improved navigation to: n  Municipal bond trade prices n  Search functions n  Market statistics emma.msrb.org | 42
  • 43. Contact Informationn  Ernesto Lanza n  elanza@msrb.org n  (703) 797-6720n  Justin Pica n  jpica@msrb.org n  (703) 797-6716n  MSRB Main Number n  (703) 797-6600n  Sign up to receive emailed news releases: https://public.govdelivery.com/accounts/ VAORGMSRB/subscriber/newn  Follow us on Twitter: http://twitter.com/#!/MSRB_News emma.msrb.org | 43
  • 44. What You Learnedn  Stories written using the EMMA websiten  Information available on the EMMA websiten  How the EMMA website can help journalistsn  How to search the EMMA website to find informationn  Types of municipal bond documents and how they can be usedn  Additional features on the EMMA website emma.msrb.org | 44
  • 45. 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 emma.msrb.org | 45
  • 46. Homework Tonightn  You will be able to download the three-question homework assignment from the next screen.n  Email your answers to linda.austin@businessjournalism.org 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 emma.msrb.org | 46
  • 47. Questions? emma.msrb.org | 47
  • 48. EMMA – Electronic Municipal Market Access The Official Source for Municipal Disclosures and Market DataUsing EMMA® to Find Great Storiesin Municipal BondsThe Municipal Securities Rulemaking Board and theDonald W. Reynolds National Center for Business JournalismMarch 27, 2012 emma.msrb.org