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
5. MassDevelopment
2010 Conference
Recent Areas of Focus by Investors
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• 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
6. MassDevelopment
2010 Conference
Appendix A
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• Most important document for investors
• Most important document for disclosure
• Organized
• Readable
• Clear
• Logical
• Orderly
• Strategic
• Professional lay-out
• Carefully worded
• No extraneous information
7. MassDevelopment
2010 Conference
Investor Presentations
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• 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
8. MassDevelopment
2010 Conference
Investor Dialogue
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• 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
9. MassDevelopment
2010 Conference
Series 2010 Investor Presentation
September 2010
$65,000,000* Tax-Exempt
Massachusetts Development Finance Agency
Revenue Bonds, Suffolk University Issue
Series 2010
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10. MassDevelopment
2010 Conference
Spring Disclosure
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• 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