Beginning in 2011, the Municipal Securities Rulemaking Board (MSRB) began raising market awareness with respect to voluntary disclosure of bank loans on the Electronic Municipal Market Access (EMMA) website1 and in 2012 encouraged state and local governments to post bank loan information on a voluntary basis on the EMMA website.2 This awareness and concern was mirrored by rating agencies such as Standard and Poor's (S&P), which mandated that all issuers of S&P-rated bonds provide S&P with all relevant documentation related to any private debt, including bank loans assumed by such issuers.3
The MSRB has now updated procedures for the EMMA website, enabling "state and local governments to make information about their bank loan financings and other debt-like obligations publicly available to investors or others."4 These updated procedures standardize the method of posting voluntary disclosures. This clarification comes after many issuers previously disclosed such information in an inconsistent manner, such as by a Material Event Disclosure.
Issuers now should make such disclosures by following these steps:5
Go to the EMMA website and click on the EMMA Dataport link in the upper right corner of the website.
- Click on the Login button and enter your MSRB organization account user ID and password. You will then be directed to theEMMA Dataport Submission Portal.
- Select the Continuing Disclosure tab and click the Create button.
- Select Financial/Operating Filing and click Next.
- From the Additional/Voluntary Disclosure section:
- Select Investment/Debt/Financial Policy.
- Complete the Consisting of free-text box with the following naming convention: Bank Loan for [Insert Purpose of Loan] (e.g., Bank Loan for New Fire Station).
- Populate the As of Date field with the date of the loan or the current date and click Next.
- From the Non-CUSIP-9 Based section, select the Ineligible for CUSIP Number Assignment option and click Next.
- Enter your issuer name and/or select your state and click the blue arrow.
- Select the issue(s) associated with the bank loan disclosure being submitted.
- To add a new issue, click the Add New Issue link, populate the fields below and click Next.
- Full Issuer Name
- Full Issue Description (Include the term Bank Loan)
- Issue Dated Date
- Expected Closing Date
- Review the pre-populated contact information and provide a new contact, if desired. Click Next.
- Upload and preview the document.
- Click Publish to finalize the submission.
Any issuer considering voluntary bank loan disclosure on EMMA or with questions may wish to consult with counsel prior to any disclosure. The attorneys in Day Pitney's Municipal Finance Group routinely counsel clients on such matters.