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4- Communicating with Debt Stakeholders- Matt Pearson & Jason Potts

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An overview of the current strategies for higher education institutions to communicate with investors and approach financing, by Matt Pearson of Morgan Stanley and Jason Potts of Suffolk University. ...

An overview of the current strategies for higher education institutions to communicate with investors and approach financing, by Matt Pearson of Morgan Stanley and Jason Potts of Suffolk University. part of Current Topics in Tax-Exempt Finance 10/29/2010

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    4- Communicating with Debt Stakeholders- Matt Pearson & Jason Potts 4- Communicating with Debt Stakeholders- Matt Pearson & Jason Potts Presentation Transcript

    • MassDevelopment 2010 Conference Communicating with Debt Stakeholders October, 2010
    • Higher Education Constituencies 2
        • Trustees
        • Administration
        • Faculty
        • Employees
        • Students
        • Parents
        • Alumni
        • Local residents and businesses
    • Investors! 3 Source Thompson Reuters Outstanding Higher Education Debt Estimated at ~ $286 billion ($Billions)
    • Massachusetts Higher Ed Issuance (New Money) 4 Source Thompson Reuters Massachusetts Higher Education New Money Debt Issuance by Year 2000-2009 ($MM)
    • Recent Areas of Focus by Investors 5
        • Specific legal security
        • Priority of payment
        • Strength of mortgage
        • Endowment performance
        • Variable rate debt (puts)
        • Tuition escalation
        • Availability of student loans
        • Hospitals / health care related ventures
        • More frequent disclosure is being requested
        • Future plans
        • Financial commitment
    • Appendix A 6
        • Most important document for investors
        • Most important document for disclosure
        • Organized
        • Readable
        • Clear
        • Logical
        • Orderly
        • Strategic
        • Professional lay-out
        • Carefully worded
        • No extraneous information
    • Investor Presentations 7
        • Only information in Preliminary Official Statement (POS)
        • Topics usually include
          • Welcome and introduction of the financing plan
          • Introduction of the speakers
          • Timing / more details of the transaction
          • Debt Structure including purpose and structural details of proposed borrowing
          • Key financial / balance sheet data
          • Breakdown of revenues and expenses
          • Enrollment Trends
          • Investment Portfolio
          • Strategic goals of the University
        • Investor Presentation Alternatives
        • Slides only
        • Voice over (recorded)
        • Live investor call
        • Posted on Institution’s website
        • Posted on Bloomberg
    • Investor Dialogue 8
        • Forms of dialogue
          • Continuing disclosure filings
          • Investor presentations
          • One-on-one meetings / conference calls / luncheon
          • Web sites designed for disclosure
          • Semi-annual conference calls
          • Fair dissemination of information through Bloomberg
    • Series 2010 Investor Presentation September 2010 $65,000,000* Tax-Exempt Massachusetts Development Finance Agency Revenue Bonds, Suffolk University Issue Series 2010 9
    • Spring Disclosure 10
        • Consideration being given to further ongoing investor disclosure
        • Probably less need for highly rated borrowers to provide
        • Types of information being considered
          • Budget
          • Student enrollment
          • Investment values
        • Balancing benefit with burden
          • Consult with counsel
          • Underwriter
          • Investors
      No information from November to November