Minority and women-owned underwriting firms may see more New Jersey bond business if the state moves forward with an initiative to examine their participation in borrowings and set goals to encourage such firms to serve as senior managers.
The Senate last week passed S. 104, which would require state issuers to review minority- and women-owned underwriting participation in deals and present suggestions for incorporating those firms at the senior-manager level.
The Senate approved the measure in a unanimous vote, and it now heads to the General Assembly. The bill described increasing minority- and women-owned participation as goals, not mandates.
“An aspirational level of utilization and relative compensation shall not be construed as a mandated quota and shall not be enforceable, but shall be considered as a goal that the state entity is encouraged to achieve,” the legislation reads. “The state treasurer shall suspend an aspirational level of utilization and relative compensation upon finding the conditions which lead to its establishment are no longer present.”
Neighboring New York began a similar push in 2008 for an increased minority- and women-owned firm presence in deals. The result is that such businesses are now more active in the state’s borrowings. In 2009, minority and women-owned firms served as senior managers on $4.2 billion of debt sold in New York, a 9.5% market share, compared to $1.5 billion in 2007, or 4.8% of the market, according to Thomson Reuters.