The Official Statement

Municipal bonds are exempt from the registration and prospectus requirements of The Securities Act of 1933. An issuer of municipal bonds is not required to provide investors with any disclosure documents whatsoever. Should the issuer decide to prepare a disclosure document, the issuer will provide investors with the official statement. The official statement will provide investors with all of the details regarding the bonds being issued. Issuers who prepare an official statement must make it available to all purchasers, as well as to any investor or broker dealer who requests one. If the final official statement is not available at the time, a request is made for information. The broker dealer may send the interested party a preliminary official statement. Alternatively, the broker dealer may prepare and forward a summary or an abstract of the official statement. If the issuer decides not to prepare an official statement purchasers must be informed in writing that no official statement will be prepared. 

An official statement includes:

  • The Terms of the Offering
  • Purpose of the Issue
  • Summary
  • Description of Bonds
  • Description of The Issuer
  • Financial Data for The Issuer
  • Regulatory Matters
  • Feasibility Statement
  • Legal Proceedings
  • Type of Indenture (Open / Closed)
  • Authorization of Bonds
  • Security Pledged, if Any
  • Construction Plans
  • Tax Status

All municipal issues offered through negotiated underwritings are required to provide an official statement. The official statement must disclose:

  • The Underwriting Spread
  • The Initial Offering Price For Each Maturity
  • Any Fees Received From The Issuer

Prior to the completion of the transaction, the member must disclose the dealer’s participation in the offering and any control or other relationship issues between the issuer and the underwriter.

 

BOND COUNSEL

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