N.J. Educational Agency Seeks Investment, Swap Advisers

The New Jersey Educational Facilities Authority is seeking an investment adviser and a swap consultant to provide investment and derivative guidance for public and private higher educational institutions that borrow through the conduit.

The authority may select one firm to serve in both capacities, or two or more companies to provide professional services. Responses are due by 4 p.m. Eastern Daylight Time on Aug. 26, according to the request for qualifications.

The authority's current investment adviser is Grant Street Group and its swap consultant is Public Financial Management, Inc. Contracts with those firms are about to expire and the authority anticipates announcing its selections in early fall, according to NJEFA executive director Roger Anderson.

Investment advisers will provide insight on the investment of bond proceeds and/or other funds, restructuring of investment funds, and long-term debt planning. The investment adviser will also serve as bidding agent for the authority.

Derivative consultants will advise on financing structures and derivative products, negotiate swap and derivative agreements, and serve as the authority's derivative bidding agent.

The RFQ asks respondents to provide information on their firm's experience with obligations affected by market changes since November 2007. In particular, the authority asks what advice firms have given to issuers on auction-rate securities and variable-rate securities that carry liquidity and those that are unenhanced.

In addition to overall experience and knowledge, the authority will consider, for both investment and swap consultant services, prior work with colleges and universities and a firm's presence in New Jersey.

Historically, investment providers and swap counterparties have paid the authority's investment adviser and swap consultant fees. The RFQ indicates that arrangement may change.

"However, if a firm wants to propose a different arrangement, the authority will consider the proposal," according to the RFQ.

The NJEFA is a conduit issuer on behalf of colleges and universities in New Jersey. The authority ranked third among Garden State issuers in 2008, selling $1.19 billion of debt, 10.2% of market share, in 12 issues, according to Thomson Reuters. During the first half of 2009, NJEFA sold $479.4 million of debt, making it fourth on the list of issuers.

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