Bond Accountability Commission 2 Recommendations Page 49
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Costs of issuance including bond insurance. Other than costs for bond insurance, costs of issuance primarily consist of bond counsel fees, financial advisor fees, rating agency fees, and other miscellaneous expenses. These costs generally do not increase with the size of the principal, 49 as there is not much difference in the amount of work involved, the amount of documents prepared, and the amount of time spent between a small and a large bond issuance. The costs for bond insurance are included in this category as well, consistent with how costs are typically reported in Official Statements of comparison districts we examined.
To analyze the upfront costs, four comparisons were undertaken: (1) a comparison of bond costs based on timing, (2) a comparison of bond costs based on size, (3) a comparison of note costs versus bond costs, and (4) a comparison of note costs. Cost of Bonds Based on Timing For this analysis, comparison districts were chosen based on being located in Ohio, having issued the same type of financing as CMSD, having issued within approximately a month of CMSD, having issued at least $5 million, and having Official Statements available on the Municipal Securities Rulemaking Board’s (“MSRB”) Electronic Municipal Market Access (“EMMA”). The upfront cost information was obtained from the Official Statements of the comparison districts. If a particular category of upfront cost 49
CMSD, however, pays to its Financial Advisors and Bond Counsel fees that vary according to the size of the transaction.