Ernesto Lanza and Justin Pica of the Municipal Securities Rulemaking Board provide tips and techniques for finding great local stories on municipal bonds through the Electronic Municipal Markets Access database.
For more information about free training for business journalists, please visit businessjournalism.org.
Using EMMA to Find Great Stories by Ernesto Lanza and Justin Pica
1. EMMA – Electronic Municipal Market Access
The Official Source for Municipal Disclosures and Market Data
Using EMMA® to Find Great Stories
in Municipal Bonds
The Municipal Securities Rulemaking Board and the
Donald W. Reynolds National Center for Business Journalism
March 27, 2012
emma.msrb.org
2. What Kinds of Stories Have Been Written
Using the EMMA Website?
http://buswk.co/wM6lVQ emma.msrb.org | 2
3. What Kinds of Stories Have Been Written
Using the EMMA Website?
http://bit.ly/GDLypK
emma.msrb.org | 3
4. What Kinds of Stories Have Been Written
Using the EMMA Website?
http://bit.ly/GDNTi8 emma.msrb.org | 4
5. Poll – EMMA Usage
n How often have you consulted EMMA?
q Never
q Once
q 2-5 times
q More than 5 times
emma.msrb.org | 5
6. Poll – Reporter Beats
n Which beat(s) do you cover? Pick all that apply.
q Business
q Government
q Education
q Health care
q General assignment
q Features, including the arts
q Sports
q Other beats
q I'm not a reporter
emma.msrb.org | 6
7. Webinar Objectives
n What is the EMMA website and how does it act as a
tool for journalists?
n What information is available on EMMA that can
help journalists report their stories?
n How do journalists use the EMMA website to find
information?
emma.msrb.org | 7
8. What Is the Municipal Securities
Rulemaking Board?
n National regulator for the municipal market
n Mission to protect:
n Investors
n Issuers of municipal securities
n Entities whose credit stands behind municipal securities
n Public pension plans
n The MSRB makes municipal market information as
transparent and widely available as possible
n Created and operates the Electronic Municipal Market
Access (EMMA®) website
http://www.msrb.org/
emma.msrb.org | 8
9. What Is a Municipal Bond?
n Type of debt security issued by a state, municipality
or county to finance its capital expenditures
n Exempt from federal taxes and from most state and
local taxes, especially if the bond holder lives in the
state in which the bond is issued
n Capital expenditures include:
n Highways
n Bridges
n Schools
n Parks
emma.msrb.org | 9
10. What Is the EMMA Website?
n The MSRB’s Electronic Municipal Market Access
(EMMA) website
n Provides access to
municipal bond data
and disclosures
n All information is
available free of
charge
http://emma.msrb.org/
emma.msrb.org | 10
11. What Information Is Available on EMMA?
n Investors, other market participants and the general
public have unlimited access to:
n Municipal bond offering documents
n Continuing disclosure documents
n Trade prices
n Interest rates
n Enables investors to better understand certain
elements of a particular security:
n Terms
n Characteristics
n Risks
emma.msrb.org | 11
12. How Can the EMMA Website Help Journalists?
n EMMA contains documents
prepared by state and local
governments
n These documents typically
are not readily available
elsewhere
emma.msrb.org | 12
13. How Can the EMMA Website Help Journalists?
n Documents contain information about a municipality,
its financial condition and its infrastructure projects
n Projects financed with municipal bonds
n Information which helps reporters understand the
local economy, development and politics
emma.msrb.org | 13
14. How Do Journalists Use the EMMA
Website to Find this Information?
n Basic municipal bond search
n Limited functionality
n Significant amount of information to sift through
n To perform basic search, use one of the following:
n Issuer’s name
n State of the issue
n CUSIP of bond or issuer
emma.msrb.org | 14
15. What Is a CUSIP Number?
n Unique identification code
n CUSIP-9
n Assigned to each maturity
of a bond issue
n Can be obtained from bond
underwriter
n CUSIP-6
n Identifies a particular bond
issuer
n Located on the official
statement of a bond issue
emma.msrb.org | 15
16. Search the EMMA Website Using a
CUSIP Number
n A source slipped you a copy of a municipal bond
disclosure document and said you should look into
the bond. You found the bond’s CUSIP number on
the document and go to the EMMA website for
more information.
n VIDEO: Search using a CUSIP number
emma.msrb.org | 16
17. Advanced Search
n Advanced search option
n Issue description n Date of issuance
n State n Interest rate
n Maturity date n Coupon rate
emma.msrb.org | 17
18. Search the EMMA Website Using
Advanced Search
n You overheard some local officials discussing a
recent bond issue that will fund a public works
facility. Knowing the state of issuance and
description of the issue, you go to the EMMA
website to get more information on the bond.
n VIDEO: Search using advanced search
emma.msrb.org | 18
19. Quiz – Searching on EMMA
n What does a CUSIP-6 identify?
q A bond issue
q A 529 plan
q A bond issuer
q A municipality
q A bond lawyer
emma.msrb.org | 19
21. What Is an Official Statement?
n Document prepared in connection with a new issue
of municipal securities
emma.msrb.org | 21
22. What Is an Official Statement?
n Describes the essential terms of the bond
n Terms of the bond
n Bond features
n Key financial and operating data
n Repayment obligations
n Can apply to multiple issues of a particular bond
emma.msrb.org | 22
23. How Is an Official Statement Helpful to a
Reporter?
n Ashtabula Area City School District, Ohio General
Obligation School Improvement Refunding Bonds
emma.msrb.org | 23
24. How Is an Official Statement Helpful to a
Reporter?
n Ashtabula Area City School District, Ohio General
Obligation School Improvement Refunding Bonds
n School enrollment and testing proficiency levels
n Education of teaching staff
n Description and value of school facilities
n Retirement expenses for teaching staff
http://emma.msrb.org/ER548130-ER424930-ER827047.pdf
emma.msrb.org | 24
25. How Is an Official Statement Helpful to a
Reporter?
n Ashtabula Area City School District, Ohio General
Obligation School Improvement Refunding Bonds
n Timing and amount of revenues
n Economic and demographic information
n Local economy data
n School district debt/long-term obligations
emma.msrb.org | 25
26. How Is an Official Statement Helpful to a
Reporter?
n Miami-Dade County, Florida General Obligation
Refunding Bonds (Parks Program)
emma.msrb.org | 26
27. How Is an Official Statement Helpful to a
Reporter?
n Miami-Dade County, Florida General Obligation
Refunding Bonds (Parks Program)
n “Building Better Communities” program information
n County services and functions
n Largest taxpayers
n Pending litigation
emma.msrb.org | 27
28. How Is an Official Statement Helpful to a
Reporter?
n Miami-Dade County, Florida General Obligation
Refunding Bonds (Parks Program)
n Market value of all property
n Employment data
n Tourism statistics
n Impact of local film industry
http://bit.ly/GEiry4
emma.msrb.org | 28
29. How Is an Official Statement Helpful to a
Reporter?
n You know that the city involved in a big upcoming
municipal bond offering recently laid off some of its
government employees. You’re interested in the
overall financial picture of the city, so you look
through the official statement for the bond issue.
n VIDEO: Finding newsworthy parts of an official
statement
emma.msrb.org | 29
30. What Are Continuing Disclosure
Documents?
n Contain important information that arises after the
initial issuance of a municipal bond
n Reflects the financial or operating conditions of an issuer
over time
n Specific events that occur after issuance
n Continuing Disclosure Agreement
n Describes the type of events about the bond that be
disclosed
n The EMMA website contains both voluntary and
required continuing disclosure documents
emma.msrb.org | 30
31. Types of Continuing Disclosure Documents
n Rule 15c2-12 of the Securities Exchange Act of
1934 requires certain information be provided to the
EMMA system:
n Financial or operational information
§ Annual financial information
§ Audited financial statements
n Event Notices
§ Principal and interest payment delinquencies
§ Rating changes
§ Bankruptcy, insolvency or receivership
§ Merger, consolidation or acquisition
emma.msrb.org | 31
32. Types of Continuing Disclosure Documents
n Some issuers and obligated persons provide
additional information after initial issuance
n Contractual arrangement
n Matter of practice
n Types of additional information:
n Additional financial or operating information
§ Accounting standard
§ Budget data
§ Consultant reports
n Additional event-based disclosures
§ Change in obligated person or agent
§ IRS communications
§ Bid for auction rate or other securities
emma.msrb.org | 32
33. Finding Continuing Disclosure Documents
on the EMMA Website
n You heard on the news that Moody’s just
downgraded the bond issues of municipalities
across the country. You’re interested in whether
your city was one of those downgraded. You go to
EMMA and look for a continuing disclosure
document to this effect.
n VIDEO: Finding continuing disclosure documents
emma.msrb.org | 33
34. Quiz – Disclosures
n Which of the following information is found in
continuing disclosure documents on the EMMA
website?
q Audited financial statements for the issuer
q Bankruptcy of the issuer
q Credit-rating downgrade for the issuer
q Communications from the IRS related to bonds’ tax-
exempt status
q All of the above
emma.msrb.org | 34
36. What Is a Municipal Bond’s Credit Rating?
n A bond’s credit rating
is an opinion about its
risk of default
n Ratings can be issued
at the time of issuance
or anytime over the
life of the bond
n Can be changed or
withdrawn at any time
n The EMMA website displays current long-term ratings
and underlying or unenhanced ratings
n Fitch Ratings
n Standard and Poor’s emma.msrb.org | 36
37. Credit Ratings on the EMMA Website
n You’re writing a story on bond issuance throughout
the State of North Carolina, and are curious as to
which municipalities have the highest credit ratings
for their bonds. You use the Credit Ratings Search
function on the EMMA website to get a broad idea
of this information.
n VIDEO: Finding credit ratings
emma.msrb.org | 37
38. EMMA Alerts
n Available for any security listed on the EMMA website
n Email notification sent when a new document is submitted
for that particular bond
n Keep apprised of newsworthy material information
n Downgrade of municipal bond
n Municipality bankruptcy
http://dataport.emma.msrb.org/MarketActivity/ManageAlerts.aspx
emma.msrb.org | 38
39. Additional Videos on EMMA on
BusinessJournalism.org
In addition to the videos in the webinar today, you can
find these short videos at http://bit.ly/EMMA2012:
n Finding credit ratings
n Signing up for email alerts about a bond issue
n Analyzing the first page of bonds’ official statements
n Finding lawsuits affecting bond issuers
n Finding recent trades and prices
n Searching for bond defaults
n Tracking IRS audits involving bonds’ tax-exempt
status
emma.msrb.org | 39
40. Political Contributions – MSRB Rule G-37
n Maintains the integrity of the municipal securities
market and prevents pay-to-play practices
n Bans municipal securities dealers from engaging in
municipal securities business after they have made
contributions to issuer officials
n Search for political contribution disclosures on
MSRB.org:
http://www.msrb.org/msrb1/pcocweb/search/
search.asp
emma.msrb.org | 40
41. EMMA Education Center
n Contains educational
resources for municipal
bond investors and users of
the EMMA website
n Videos
n Glossary of municipal bond
terms
n Frequently asked questions
http://emma.msrb.org/EducationCenter/EducationCenter.aspx
emma.msrb.org | 41
42. EMMA Mobile
n Mobile-friendly version of the EMMA website that
optimizes certain elements of the site for mobile
display
n http://emma.msrb.org/
n Direct access and improved navigation to:
n Municipal bond trade prices
n Search functions
n Market statistics
emma.msrb.org | 42
43. Contact Information
n Ernesto Lanza
n elanza@msrb.org
n (703) 797-6720
n Justin Pica
n jpica@msrb.org
n (703) 797-6716
n MSRB Main Number
n (703) 797-6600
n Sign up to receive emailed news releases:
https://public.govdelivery.com/accounts/
VAORGMSRB/subscriber/new
n Follow us on Twitter:
http://twitter.com/#!/MSRB_News emma.msrb.org | 43
44. What You Learned
n Stories written using the EMMA website
n Information available on the EMMA website
n How the EMMA website can help journalists
n How to search the EMMA website to find
information
n Types of municipal bond documents and how they
can be used
n Additional features on the EMMA website
emma.msrb.org | 44
45. Tomorrow’s Session – Noon and 4 p.m. ET
n Yamil Berard of the Fort Worth Star-Telegram
n High rate of default for a particular type of muni called
conduit bonds for Tarrant County
n Lynn Hume of the Bond Buyer
n IRS investigations into community development districts
emma.msrb.org | 45
46. Homework Tonight
n You will be able to download the three-question
homework assignment from the next screen.
n Email your answers to
linda.austin@businessjournalism.org
by 11:59 p.m. PT March 28.
n Those who answer correctly will be entered into a
drawing for a $10 Starbucks gift card.
n A video showing how to find the answers will be
available at http://bit.ly/EMMA2012
emma.msrb.org | 46
48. EMMA – Electronic Municipal Market Access
The Official Source for Municipal Disclosures and Market Data
Using EMMA® to Find Great Stories
in Municipal Bonds
The Municipal Securities Rulemaking Board and the
Donald W. Reynolds National Center for Business Journalism
March 27, 2012
emma.msrb.org