The Municipal Securities Rulemaking Board's EMMA system received more than 500,000 continuing disclosure documents from municipal securities issuers or their agents between July 2009 and March 2013, the board reported Wednesday.
The secondary market disclosures of financial and operating information as well as event notices, continue to increase on a yearly basis, with 139,493 filed in 2012, compared to 132,777 in 2011 and 130,305 in 2010. About 43,520 of these documents have been filed for the first quarter of this year, up 11% from the 39,175 filings submitted during the same period last year.
The lion's share of event notices submitted to EMMA were bond calls. At least 52,461 notices of these were filed in 2013, accounting for 38% of all continuing disclosure filings. About 22,289 audited financial statements or comprehensive annual financial reports (CAFRs) were filed last year, accounting for 19% of all submissions. In addition, there were 28,900 filings of annual financial information and operating data in 2012, accounting for 16% of all submissions to EMMA and 3,380 filings of rating changes, which were 7% of all filings.
Notices of issuers' failure to provide annual financial information were also up, at 2,036 filings in 2013 from 1,888 in 2011 and 1,747 in 2010.
Filings of quarterly and monthly financial information were also up to 9,641 in 2012, from 8,286 in 2011 and 7,287 in 2010.
Material event notices of bankruptcy, insolvency and receivership were up dramatically to 94 in 2012 from 67 in 2011 and only five in 2010. Filings of principle and interest payment delinquencies also were up to 236 in 2012, from 190 in 2011 and 219 in 2010.
Notices of non-payment related defaults were 177 for last year, compared to 147 in 2011 and 199 in 2010, while filings of unscheduled draws on debt service reserves were 243 in 2012, 231 in 2011, and 283 in 2010.
The 3,380 notices of rating changes were down dramatically from 9,052 in 2011 and 11,293 in 2010.
Issuers filed only 65 event notices of communications with the IRS in 2012, up from 41 in 2011 and 37 in 2010.
They filed 18 material event notices of adverse tax opinions and events affecting the tax-exempt status of bonds in 2013, compared to 17 in 2011 and 13 in 2010.
The Securities and Exchange Commission's Rule 15c2-12 on disclosure bars firms from underwriting bonds unless the issuer has contractually agreed in writing to disclose annual financial information and operating data, as well as notices of material events. In addition, the MSRB has recommended issuers voluntarily file additional information such as event notices of certain communications with the IRS and quarterly or monthly financial information.
California and its municipalities continue to submit the most continuing disclosures to the MSRB. Between July 2009 and March 2013, California accounted for nearly 12% of all disclosures, not surprising since issuers in the state accounted for nearly 16% of all munis outstanding, the MSRB said. Texas, Florida, New York, and Pennsylvania are the other states with the most number of disclosures, at 10%, 7%, 6% and 5% of all filings, respectively.
March and December typically are the busiest months for the number of submissions received, primarily due to sharp increases in filings of annual financial and operating information as well as audited financial statements. The increases occur approximately six months after Sept. 30 and June 30, which are the fiscal-year end dates for many muni issuers, the board said.