MFCI is the leader among firms providing financial consulting services to governments in the state of Michigan. Since the early 1980’s, MFCI has been advising cities, counties, villages, townships and other governmental units on the best way to solve financial problems. Included in our services are the development of individual ways for a municipal client to market its bonds, notes, and other debt and revenue obligations. The firm principally assists government units in raising funds by structuring the borrowings, securing credit ratings and where necessary, credit support needed to market the issues at the lowest possible interest rate. In addition, MFCI advises its municipal clients on the appropriate ways to invest public funds in secure investments so as to avoid the type of catastrophe, such as that struck Orange County. The marketing strategy we will use for the client is best described in the following steps:
- Analysis and recommendations with respect to bidding rules appropriate to the size and complexity of the issue within market preferences and constraints. Rules may include the flexibility for the bidders to use serial, term, capital appreciation bonds or derivative products, such as floater-inverse floater securities. Use of good faith checks; auction or “all or nothing” bidding restrictions will be reviewed and recommendations made. The bidding rules will be developed to encourage the largest number of bidders and to provide incentives for efficient bids to be structured so that the resulting debt service to be paid by the client will be the lowest possible.
- Review of the client’s debt management plan and policies.
- Planning and execution of each issue in a manner consistent with the client’s debt management plan and policies.
- Completion of an analysis of financing alternatives in order to recommend the amount, the optimal financing method and schedule of financing. The analysis will address general marketability questions and will include preliminary debt schedules and repayment plans.
- Recommendations with respect to security provisions, maturity schedules, amortization schedules, redemption provisions and credit enhancement features if deemed necessary or cost effective.
- Assist the client in the selection of ancillary service providers, such as bond registrar.
- A review of the appropriate sale method, including the advantages and disadvantages of a competitive sale versus a negotiated sale given market conditions, timing concerns, size of the issue, facilities or equipment to be financed, and general security and redemption provisions.
- Implementation of a comprehensive credit rating strategy appropriate to the financing. Development of rating agency presentations and participation in those meetings, if requested.
- Prepare and file any documents required for approval of bonds by the Michigan Department of Treasury.
- Assist in the preparation of a the Request for Proposal or Notice of Sale and Bid form to be used by the client in advertising the sale and describing the terms thereof and the form and rules by which bids will be taken and evaluated. The Request for Proposal or Notice of Sale and Bid form will be distributed along with the Preliminary Official Statement to prospective bidders.
- Distribute the bidding documents to MFCI’s nationwide mailing list of prospective underwriters. This list contains over 120 dealers which actively bid for and purchase bonds at competitive sale.
- Participation in the preparation of the Official Statement, as well as other financing documents and, if necessary, participation in all official statement drafting meetings.
- Apprise client of credit market conditions on a regular basis in preparation for selecting the most favorable time to enter the market.
- During the two weeks preceding the sale place telephone calls to the syndicate managers on previous competitive sales to market the issue and coordinate the creation of bidding syndicates.
- On the day of sale, receive and evaluate bids to determine the most favorable bid and recommend appropriate action for the client.
- Assisting the client and other members of the financing team in the bond closing process, including attending the closing, if appropriate, and reviewing appropriate legal documents for conformity to the terms of the sale.
- Preparation and delivery to the client of a Post-sale Analysis which will document the results of the sale. This analysis will be prepared by the financial advisory team and reviewed in detail with interested client staff, as requested.
- Ongoing availability throughout the life of the bond issue to discuss general matters related to the financing and answer any questions. This service is provided as part of our initial fee and no supplemental billings occur for this service.
Since its founding in 1981, the professionals at MFCI have changed the way Michigan municipalities sell bonds. These professionals have introduced the following innovations to Michigan public finance:
- The first advanced refunding to be sold at competitive sale.
- The first competitive sale to use a financial surety bond in lieu of a good faith check. (Today nearly all competitive sales use a financial surety bond. The result is that more bids are being submitted from out-of-state bidders that were previously unable or unwilling to bid on Michigan issues).
- The first to require bidders to bid in “ascending” rates to lower the true interest cost of the issue and preserve the issuer’s ability to call.
- The first to reduce underwriters discount from the standard 2%.
- MFCI was the first financial consulting firm in the State of Michigan to accept bids for a public sale via the internet.
One of the most important duties of a financial advisor is to advise and assist its client in obtaining the highest possible credit rating. Buyers of municipal bonds submit their bids on such bonds based upon the credit rating of the issuer. MFCI professionals have more than 40 years of experience in orchestrating presentations for its clients to meetings with representatives of the major rating agencies especially Moody’s Investors Service (“Moody’s”) and Standard & Poor’s (“S&P”).As financial consultant to Oakland County on at least one bond or note issue every year since 1981, our firm has greater experience with County credit than any other firm in Michigan. Our firm has in the past six years served as financial advisor to Oakland County in connection with its spectacular success in obtaining rating upgrades from both Standard & Poors, Inc. and Moody’s Investors Service.During the period 1993 through 2015 MFCI has been instrumental in obtaining the following changes in credit rating for Oakland County:
Also in the past fifteen years MFCI was successful in obtaining upgrades for the County of Macomb and the City of Portage. The County of Macomb and the City of Portage both had an upgrade of A+ to AA- from Standard & Poor’s, and in 2002 Macomb County obtained an additional upgrade from Moody’s of Aa1 to Aaa rating. Furthermore, in 2004 Macomb County received another upgrade to AAA rating from Standard & Poor’s.