IHS Markit has launched a tool for participants to upload new-issue deal information for the municipal market's forward calendar, including an ESG designation interface where submitters can request to get their competitive deal pre-approved as green, social or sustainability bonds.
The Muni
"This can allow issuers to provide potential investors with an earlier look at upcoming transactions, while dramatically increasing deal submission efficiency for competitive municipal offerings," IHS Markit said in a release.
“Prior to the availability of our new tool, the municipal market had an antiquated deal submission workflow with significant email correspondence and challenges in exchanging large file attachments," said Matthew Gerstenfeld, municipal business development lead at IHS Markit and co-creator of the NIUF. "We recognized an opportunity to modernize the entire workflow and market participants tell us it has never been easier to publish deals on the forward calendar."
IHS Markit has received more than 100 submissions from 26 firms for a total of $2.5 billion in issuance after IHS Markit notified 16,000 participants of the NIUF last year.
Additionally, 35% of par recently submitted has requested their deal be reviewed and potentially pre-qualified as International Capital Market Association (ICMA) green, environmental, social and governance (ESG) and sustainability bonds.
The goal is to ease the way in which market participants upload and organize deal documentation for record keeping and regulatory recording requirements.
"When IHS Markit first introduced the new-issue upload tool, we were concerned — like many others — that integrating it into our bond sale process would be both cumbersome and time-consuming," said Keith Schmitz, manager and senior public finance analyst at Ehlers Public Finance Advisors.
That said, Schmitz said the firm began using the tool in early January and successfully uploaded about 20 competitive offerings.
"And I must say, our early experience has been a positive one. The primary benefit this online utility delivers is that we now have more control over when our upcoming sales get posted," Schmitz said. "As a result, our offerings are published to the Parity calendar quicker, effectively lengthening our bond marketing period. We plan to use the new-issue upload tool for all future bond sales."
Information collected from the NIUF can also be streamlined across the entire IHS Markit ecosystem of platforms for deal origination, such as the competitive deal system Ipreo BiDCOMP, negotiated underwriting system Ipreo MunicipalBookrunning and the Ipreo Muni for Buyside system, which enables investors to monitor new deals.
“Deals can now be submitted to the calendar far in advance of the sale date, with pertinent information updated in real-time and governed by our quality control team," said NIUF co-creator Michael Lieberman, a senior product design analyst at IHS Markit. "This helps to ensure that accurate, verified and up-to-date documentation is available for investors, particularly those interested in green, social and sustainability projects.”
IHS Markit noted that as the demand for green, social and sustainability bonds continues to grow, IHS Markit has said it has made it easier for issuers and underwriters to obtain those designations on competitive new-issue deals, creating more green designations for investors.
The NIUF has an ESG designation interface where submitters can request to get their deal pre-approved by verifiers for ICMA designations of green, social and sustainability bonds. If the deal meets the criteria for these labels and the issuer or financial advisor elect to allow such designations, that option will be available to the winning underwriter. The verifier will provide a second party opinion and related documentation, in addition to ICMA logos for the last OS and the winning underwriter will pay the verifier fee.
There is no fee charged to the issuer.
