The Empire State Development Corp. yesterday selected a new slate of underwriters, financial advisers, and financial products providers, expanding its senior and co-manager rosters to include 28 firms, up from 22 in 2007.
The issuer chose the pools from the 57 firms that responded to a request for proposals released in June, some of which applied for more than one position. The firms will serve two-year terms on a rotating basis with the possibility of two six-month extensions.
The ESDC is the fourth issuer of the state's personal income tax bonds to choose underwriters under new guidelines finalized last year to increase participation of minority- and women-owned firms on state-backed bond deals. In the turmoil that rocked the financial sector last year, a few big names disappeared through mergers or bankruptcy. In the event that a firm in the underwriting syndicate is acquired, merged or "otherwise reconstituted" the successor firm will be able to take its place.
ESDC enlarged its senior manager pool of underwriters to 11 from the eight it chose in 2007. Barclays Capital Inc. and Rice Financial Products Co. are on the roster of underwriters for the first time. JPMorgan, Loop Capital Markets, Samuel A. Ramirez & Co., Siebert Brandford Shank & Co., and Wachovia Bank NA stepped up from co-manager positions. Citi, Goldman, Sachs & Co., Merrill Lynch & Co., and Morgan Stanley returned as senior managers. Four of the managers are MWBE firms.
Not returning were Banc of America Securities LLC, which will participate through its ownership of Merrill Lynch; Bear, Stearns & Co.; Lehman Brothers; and UBS Securities LLC.
The issuer also selected 17 co-managers and 23 selling group members.
Designations were based on several factors, including the experience of the firms and their employees; knowledge and technical expertise; retail and institutional distribution capabilities; innovation; and ideas and their commitment to diversity. The corporation said it will continue a practice of allowing MWBE firms that were designated in the co-manager category to serve as co-senior managers.
The ESDC has sold $10.41 billion of bonds since 2000, of which $6.84 billion were new money, according to Thomson Reuters. The issuer has sold $1.08 billion of new-money bonds so far this year. The corporation could increase its level of debt issuance in the future because of a change in state law this year that expanded the purposes for which the ESDC and the Dormitory Authority of the State of New York can sell PIT bonds. Previously, certain PIT-bond-financed capital projects would have had to be sold through the New York State Housing Finance Agency, the New York State Thruway Authority, or the New York State Environmental Facilities Corp. All PIT issuers except the Thruway Authority, which recently issued an RFP for underwriters, have chosen a new syndicate under the MWBE guidelines.
The ESDC selected three financial advisers, as it did last time, from seven responses. New to the list was Butchermark Financial Advisors LLC, a New York City-based firm formed last year by two former Goldman bankers, George Butcher and Stephen Mark. Returning were Public Resources Advisory Group and Public Financial Management. Swap Financial Group LLC was dropped from the roster.
The number of financial services providers, which are eligible to serve as swap counterparties on ESDC deals, remained the same as well. The nine firms were selected from 15 respondents. Firms were chosen based on the size of their swap portfolio, reputation, and credit rating. New to the list were Barclays, RBC Capital Markets Corp., Rice Financial, Siebert Brandford Shank, and Wachovia. Returning were Citi, Goldman, Merrill Lynch, and Morgan Stanley. JPMorgan, Banc of America, Bear Stearns, Lehman, and UBS were dropped from the list.
The RFP did not include bond counsel firms as it did in 2007, when it chose nine firms.