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Bond Accountability Commission 2 Recommendations Page 36

Bonds and Notes in sizable amounts and as frequently as does CMSD, that is a concept that should be implemented and evaluated, at the very least as a pilot program. Such meetings are especially desirable in view of issues relating to CMSD’s property tax base 36 and associated questions that investors naturally would have. The meetings could become an integral facet of an investor relations program. Investor meetings may occur directly in person or in larger conference-type settings, by telephone conferences, or given technological developments, in “webinars.” The

                                                                                                                                                               and bond issues. This is a strategy that is frequently used by issuers of corporate debt, and a strategy that would help Cleveland Schools to more quickly reap the benefits of the management improvements that have taken place. [Emphasis added.] SBK-Brooks stated at page 7 of its proposal— A successful negotiated sale will require a multi-faceted marketing strategy focused on Ohio institutional and retail buyers. To enhance institutional interest, the lead manager should coordinate with the financial advisor and hold information meetings with targeted institutional investors around the country. While Ohio participation will be important, the District’s issue will attract major buyers from many other states. If the timing of the issue permits, we recommend holding meetings with key institutional investors in Cleveland, New York, Chicago and Boston. The District may want to consider utilizing a “video conference” presentation for analysts and portfolio managers across the country. Major buyers of Ohio issues would meet at a video conference center in their State and participate in a presentation and “questionanswer” session. At these meetings (in person or video conference), representatives from the District, the Financial Advisor and the financing team will discuss credit and other topics as well as explain the proposed issue structure to major bond funds, money managers and other institutional buyers and respond to any questions. This outreach is then followed up by institutional salespeople to further explain the District’s credit in detail. Retail buyers are typically less interest rate sensitive than institutional investors. This can result in interest cost savings for the District. With an effective pre-marketing program, SBK-Brooks can generate this critical retail demand, aggressively price the bonds and produce a lower interest rate. 36

See the discussion of CMSD’s tax base in “CMSD Financial Considerations” beginning at page 85 and “Cash Flow Considerations” beginning at page 104 herein.

BAC2 Recomendations Final 04062010