Key Highlights this Week!
- Free Webinar tomorrow: Proposed IRS Rules on Issue Price and the Industry Impact – see link!!
- The Debt Limit will be Reached Two Days Earlier than Expected – multiple links
- Illinois Skipping November Pension Payment – and Maybe More – full article
- Is Debt Exchange for Puerto Rico Feasible or Not? – full article
- Figure in Troubled Bond Deals to Leave Board of Healthcare Company – full article
- Don’t Miss Out! Registrations are Coming in for FREE “Best Practices” CPE: Get 3 hours of dedicated Post Issuance Compliance training with CPE in November in Sunny AZ – registration details and link inside!
NOTE: I will be traveling the 21st through the 26th for a conference, so next week’s edition of the Monday Muni Minutes will be published on Tuesday, October 27th!
So…here goes…today’s Monday Muni Minutes!
Enjoy and have a great week! Deb
CURRENT EVENTS
The Debt Limit…Lew Says Needed 2 Days Sooner than Expected
While we tend to focus on debt issuers at the state and local level, this week our attention turns to the largest municipal issuer of the country – Uncle Sam…aka The US Treasury.
All eyes have been watching Washington DC…and the debt clock. 
As usual, there is a lot of back and forth between the Treasury Department, Congress and the White House over spending cuts, increased infrastructure needs and the looming debt ceiling.
Treasury Secretary Lew stated last week that, while the United States reached its statutory capacity back in March, that they will run out of extraordinary measures to finance the nation’s obligations two days earlier than expected – now November 3rd.
When this day arrives – which is less than two weeks away, Lew projects that the Treasury will have less than $30 billion on hand to meet its debts – which equates to less than ½ day’s cash based on their “high day” expenses of $60 billion.
Imagine this scenario…
What would it be like in your office if your “Days Cash on Hand” was below 24 hours?
To get fuller and diverse perspectives, you can read the following articles:
Read Treasury Secretary Lew’s letter to Congress here.
Read the Wall Street Journal’s perspective here.
Read CBS News perspective here.
If you are curious – check this out: For a little fun…here is a link to the Debt Clock…in real time!
So, what are your thoughts??
Free Webinar tomorrow: Understanding Proposed IRS Rules on Issue Price and the Industry Impact
Here is the information a gracious fellow issuer member shared…
Understanding Proposed IRS Rules on Issue Price and the Industry Impact — CDFA // BNY Mellon Development Finance Webcast Series — |
| This summer, a proposal was released from the IRS affecting how and when the issue price of tax-exempt bonds is calculated. This added regulation will be used to determine bond yield for purposes of arbitrage investment restrictions.
Although the proposal may serve to allow for more versatility between public and private sector participants, critics think that it will be a disincentive for players in the bond field. This alternative method for calculating issue price has been criticized as ‘not workable’ and needing clarification. Before the proposal is made into a rule, however, the IRS will host a public hearing on October 28, 2015. CDFA, in partnership with The Bank of New York Mellon, has brought together experts in the realm of issue price, for an open discussion on the proposal and how it will impact our industry. They will discuss this new method for calculating issue price, touching on both the positive and negative changes it may have on the bond field. Join us on Tuesday, October 20, 2015 at 1pm EDT for this timely discussion, and share your thoughts on the proposed rule. |
[Editor’s Note: Special thanks to fellow issuer member Lisa D. who shared this CDFA information on Friday afternoon for your benefit!!]
OUT & ABOUT
Conferences:
There are two big Bond Buyer Conferences this week and next:
- The California Public Finance Conference – October 21-23
- Healthcare and Higher Education Conference – October 27
Additionally, there are several other conferences and regional events for the last quarter of 2015…
You can go to this Bond Buyer link to review what’s coming up and register!
Resources:
Download NABL’s “Crafting Disclosure Policies” Report
IRS Interim Guidance on BABs and Other Direct-Pay Bonds
IRS 39-Page Memo TE/GE-04-0715-0019
See the full article in the August 3rd Edition of the Muni Minutes!
Replay: Webinar: MCDC – What Comes Next for Muni Underwriters
By: DIVER by Lumesis and hosted by the Bond Buyer
IT was AWESOME! In case you missed it…
Here is the replay link and the slides.
Munivestor.com
Track, search, analyze and keep up on critical bond news – looking at it from the bondholder’s perspective.
On-Demand Post Issuance Compliance Training for Issuers
“Compliance Basics” – a FREE, 3-part video Compliance Framework training, plus the Monday Muni Minutes.
Just Released – with a valuable and amazingly cost-effective “team learning” option!
NEW In-Depth Training, PIC Essentials: The Audit-Proven Blueprint – covering The IDR – Form 4564, Project Accounting Boot Camp and our hot-button friend, PBU!
On-Demand Webinar
Resource: On Demand Replay of Continuing Disclosure after MCDC
Slides: Final Slide Deck for Continuing Disclosure after MCDC
Muni Market Minute Updates
(Quick news bits on topics we’ve covered in earlier MMM editions!)
A quick note: While my shoulder is recovering over the next three or four months, items of interest here will be shorter and, if allowable, links to the full article will be provided for more detailed information.
Illinois Skipping November Pension Payment
Illinois is so strapped for cash that it is skipping its $560 million November pension payment…and may skip December’s too if a budget is 
not passed.
State Comptroller Leslie Geissler Munger said, “This decision came down to choosing the least of a number of bad options and it saddens me that we’ve reached this point. But the fact is that our state simply does not have the revenue to meet its obligations.”
You can read the full open Bond Buyer article here.
Some Question Feasibility of Debt Exchange Proposal for PR
Puerto Rico has been the focus of laser-like attention – and not much of it good lately.
At the front of the discussion is a proposal being considered by the US Treasury and area officials to offer an “exchange” of $72 billion in bonds for a “superbond” that would be backed by a variety of taxes from the commonwealth.
Treasury would not issue any bonds or guarantee the “superbonds,” but would act as an intermediary…
While there are lots of questions, one quote in particular is worth considering in the larger picture of bond oversight, at least in my mind.
Here it is…from Moody’s.
Moody’s said, “If the ‘superbond’ plan came to fruition in conjunction with a federal financial control board, it would formalize the federal government’s role as the effective ‘restructurer in chief’ and likely accelerate the restructuring negotiations.”
You can read the full open Bond Buyer article here.
House Panels Highway Proposal Raises Road Funding
In what would be a first since 2005, Congress may have the opportunity to vote on and pass a $325 billion, six year proposal for highway infrastructure.
Although the proposal is less than what Democrats had asked for to get ahead of infrastructure needs, it appears to fall in line with projected revenues from the Congressional Budget Office.
A vote is expected on October 22nd, which is just before the current funding expires on October 29th.
You can read the full open Bond Buyer article here.
Figure in Troubled Bond Deals Leaves a Company Board
In a follow up to our article in the October 5th Muni Minutes regarding the missing $2 million of debt service reserve funds, this week we learn that a central figure in that fiasco will step down from the board of a prominent healthcare company…
You can read the full open Bond Buyer article here.
[Editor’s Note: We hope you enjoy these open article topics this week from the Bond Buyer – as well as the various sources in Current Events on the Debt Ceiling deadline, including the link to the Debt Clock in Real Time!]
We hope you enjoyed this week’s edition of the Muni Minutes!
Due to high demand, we created PIC Basics as a free subscriber resource and then PIC Essentials – The Audit-Proven Blueprint to provide practical, hands-on tools you can use.
Solving the Compliance Puzzle is GREAT for Your Bottom Line!
We have also spoken at local and regional seminars as well as conducted numerous virtual interactive conference sessions…with more to come!
Again, thanks to everyone who participated in the PIC Essentials: Next Steps Survey! We really appreciated your thoughtful comments and the obvious desire for practical compliance information you can use.
So, we have already started working on quarterly trainings to address your three biggest fears – and I am working with a couple of professionals who will likely join me in the sessions as well.
Given the recent news and the IRS’s focus for 2016, our next three trainings will be:
- Beefier “inside the issuer trenches” look at what you need to have in place BEFORE an IRS or SEC audit
- Succession planning – stopping the compliance “brain drain”
- Streamlining – including some cool policy and procedures tips!
Stay tuned for more information (and maybe a few more questions) in the next few weeks!
In the meantime…
Remember: Take small bites. For more information or other resources, check out our Knowledge Library. You can also ask a question 
in the comments section or reach out to us privately via e-mail and we’ll do our best to help.
You are welcome to download my nationally published AFP article, “A Taxing Dilemma.” In it, I share how we, as issuers, can systematically do a better job of understanding and managing our compliance programs. I think you will see strong similarities in what I experienced and what the IRS and SEC are focusing on…
Want FREE dedicated Post Issuance Compliance CPE?
If you or fellow issuer friends are going to be in the Phoenix, AZ area on November 16th, there will be a FREE 3 hour CPE-eligible post issuance compliance best practices training seminar – with a complimentary networking reception following the training! And yes, I will be one of the five expert guest panelists!
Here is the downloadable flyer and registration link!
We hope you found this week’s edition of the Monday Muni Minutes valuable and informative.
We really do look forward to your feedback – and to provide the best content possible.
Have a GREAT week!
In closing, we are so excited that PIC Essentials: the Audit-Proven Blueprint is now available! A special welcome to members who joined us. We look forward to your comments, questions and chatting with you in the Private Facebook Group – Club PIC!
NOTE: You can still join the learning group here: PIC Essentials: the Audit-Proven Blueprint.
Plus, as we believe so strongly in the team approach to success, we are offering a tremendous “team discount,” where you and four additional compliance members within your agency or company can join the series right along with you…for only $70 more!
We hope you found this week’s edition of the Monday Muni Minutes valuable and informative.
Chat soon!
As always, your comments are welcome…scroll down and let us know what you think about any of the articles!
Remember, next week’s edition will publish on Tuesday – thanks!
To your compliance success,
Debbie
The greatest compliment you can pay us is to share this newsletter with your issuer friends….
P.S. Enjoy reading the Monday Muni Minutes each week? Invite your issuer friends to join us on Issuer 2 Issuer so they can get their free online training, PIC Basics! They will also get the Monday Muni Minutes delivered directly to their inbox as well as receive a special “new member” discount offer on the PIC Essentials training!
P.P.S. PIC Essentials: the Audit-Proven Blueprint is now available! You can sign up for the informative, on-demand webinar series by clicking above! Read about the “Team Discount” above! It’s truly a great deal.
P.P.S. Want a one-click way to get faster information? If you are on LinkedIn, you can get access to breaking muni news articles as well as interesting compliance tips and resources, posted by us during the week. Join our private LinkedIn Group Page, and follow us on our Company Page.