New Chair Wants to Raise NFMA Profile

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Jeffrey Burger, the new chairman of the National Federation of Municipal Analysts, worries that one of the biggest threats to municipal analysis may be complacency about the relative stability of municipal credits in recent years.

The predictions of widespread defaults and bankruptcies, made just a few years ago by some analysts and pundits, never materialized.

“Some could say, ‘The municipal analysts were so scared and worried [that] there were going to be mass defaults, and they just didn’t occur [so] why do I need a credit analyst?’” Burger said in a recent interview with The Bond Buyer.

But Burger, a 37 year old portfolio manager with Standish Mellon Asset Management Co., in Boston, said municipal analysts remain valuable as ever to municipal finance, which plays a critical role in funding America’s infrastructure.

He hopes to use his one-year term to stress that point, and to make NFMA a leading resource in the muni-bond sector. 

Burger noted that the group, which reported revenue of $621,610 on its IRS Form 990 for calendar year 2011, has some 1,300 members, up from 1,051 in 2008.

To achieve this goal, Burger said NFMA plans hold education campaigns for university students, revamp its media and communications outreach efforts and continue working with other groups to develop best disclosure practices.

“I want folks to understand how vitally important municipal bonds are. [They] are really the backbone of our society,” he said.

Burger added that it’s the job of analysts “to say why we are still relevant and important.”

“The role of the professional municipal credit analysts has been heightened,” he said.

Burger said the muni market is a “relative-value market,” and primarily a market for retail investors, who are particularly concerned with credit quality.

“There are differences between credits. It is not a homogeneous market and credit still matters,” Burger said. “You still get compensated for making the right call versus the wrong call.”

The group’s 2013 goals were set in motion in mid-January at the first board meeting of the year when Burger, the newly named chair, appointed a task force charged with developing a plan to hold university events.

The events could include full- or half-day sessions introducing the muni analyst profession to students, or seminars at campuses open to NFMA members as well as students, Burger said.

“This is a positive way and a proactive way to promote ... the NFMA [and] our industry to up-and-coming analysts,” he said. The events will also target students interested in related fields, such as public administration, government or finance.

The task force is expected to deliver an action plan at the May board meeting in San Diego.

NFMA is also seeking to raise its stature by improving its communications efforts and its joint work with other groups. Leading these efforts is a new employee, Industry and Media Liaison Bill Oliver, who joined the group in early January as a consultant.

Oliver, who will also help craft comment letters to regulators, was NFMA chair in 1995 and has more than 30 years of experience in the muni sector. He has been director of municipal research at Alliance Capital Management, part of AllianceBernstein Corp., and Prudential Capital Management.

Burger said NFMA will improve internal communications to encourage members to become involved in the group and will develop a “comprehensive” external communications plan that could call for use of newer media avenues, such as Twitter, Facebook, and LinkedIn.

Within the next five months, NFMA plans to release bank loan disclosure guidelines, which were developed by the analysts group in partnership with others, including the American Bankers Association, Bond Dealers of America, the Government Finance Officers Association, the Investment Company Institute, the National Association of Bond Lawyers, the National Association of Health and Educational Facilities Finance Authorities, the National Association of Independent Public Finance Advisors and the Securities Industry and Financial Markets Association.

Lisa Washburn, NFMA board secretary and co-chair of the industry practices committee, has coordinated the effort.

In the coming days, the group also plans to release recommended best disclosure practices for issuers of housing bonds.

NFMA is also working on disclosure best-practices for issuers of general obligation bonds, dedicated revenue bonds and charter school bonds.

Another goal for 2013: to restart a joint project with the Government Finance Officers Association to create “interim disclosure goals” for issuers, Burger said,

The project would be headed by Mark Stockwell, a senior analyst at Standish Mellon and co-chair of the disclosure committee who initially pushed for the goals when he was NFMA chair in 2010. The project could culminate in a paper recommending that issuers disclose, between annual filings, some readily-available financial or other information.

“We don’t want anybody to do any incremental work — something that is not required by current stature of law,” said Burger. “But if a government is producing certain documents and can make those available, let’s work with them.”

Burger said NFMA will collaborate with GFOA leaders like Ben Watkins, director of Florida’s division of bond finance and chair of GFOA’s committee on governmental debt management.

NFMA believes better disclosure could be achieved if Congress grants the Securities and Exchange Commission the authority to regulate the content and timing of issuers’ disclosures, as was recommended  in the SEC’s July 2012 muni report.

Burger said he and colleagues have asked SEC officials and House Financial Services Committee staff who in Congress might champion such legislation, but that no firm supporters have been named.

“With so much attention to bigger issues right now, there isn’t [a congressional supporter] that I’ve been able to identify,” Burger said.

NFMA is not a lobbying organization, but Burger said the group can still contribute to conversations about the report.

“We can be a resource, providing general credit expertise, and outlining what it is that municipal credit analysts need and want and desire,” he said.

Burger realizes he had broad goals and high expectations for the board of directors.

“I want to increase the attention I pay to responsibility and accountability,” Burger said, calling it a privilege and an honor to serve on the board. “We all have day jobs, but you don’t want to give folks a free pass and look at this just as an opportunity for networking.”

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