WASHINGTON — The National Federation of Municipal Analysts will ramp up its disclosure efforts this year by publishing guidance on general obligation bonds and new issues, new NFMA chair Susan Dushock said in a recent interview.
Dushock, a vice president at Sun Trust Bank in Florida, discussed the group's priorities and plans with The Bond Buyer roughly one month into her tenure as president of the more than 30 year-old organization which now boasts over 1,300 members.
She has been a charter member of the NFMA from its formation in 1983, and said the federation is going to be going "back to basics" during her presidency, which covers calendar year 2014.
Dushock got her start at the now defunct Reynolds Securities during the New York City fiscal crisis, and spent nearly 22 years at Lehman Brothers from 1980-2002 doing municipal research for and specializing in state and local housing bonds. Dushock said she looks back fondly at her work there during the 1980's "black box era," when some wall street firms were executing transactions designed solely to earn arbitrage profits. The proliferation of shady deals offered her an enjoyable challenge as an analyst.
"It was really a lot of fun, trying to sniff the good out from the bad," she said.
After leaving Lehman, Dushock also had notable stops as a marketing manager at Digital Assurance Certification and a director at Bank of America Global Capital Management before joining Sun Trust in 2011, where she is responsible for analyzing the credit quality of investors' portfolios.
She has been active in the municipal finance analyst community continuously during that time and said her long tenure with the NFMA has given her experience that will aid her in leading it this year.
"I've really had the opportunity to learn the organization, learn how it works," she said.
One of the key missions of the NFMA is to provide education to issuers of municipal bonds from the analyst's perspective, especially in terms of disclosure.
"Disclosure has been a big thing for us," said Dushock, who added that one of her goals this year will be to focus on helping less sophisticated issuers understand what analysts need them to disclose.
"Where I find there is a bit of a disconnect is the smaller issuers," she said.
Dushock added that she even combs the Municipal Securities Rulemaking Board's EMMA website to find issuers who fail to file their necessary disclosure documents, and then calls them to discuss how and why the failure happened.
The NFMA has a full slate of 2014 plans that aim to benefit members and encourage the next generation of muni analysts, as well. A paper on best disclosure practices for general obligation bonds will be out in the coming months, Dushock said. The nature of GO bonds has come under heavy scrutiny since Detroit's bankruptcy filing last year and the industry-wide revelation that the backing revenue and strengths of the covenants in different GO offerings can vary widely depending on the issuer and on state law.
Also likely out in early summer will be a white paper on new issue disclosure that Dushock said has been in the works for some time.
The NFMA will hold its annual conference in Florida May 6-9, and will host a roundtable there that is scheduled to include MSRB executive director Lynnette Kelly as well as Securities and Exchange Commission muni chief John Cross, among others. Dushock said she expects very good attendance.
Besides that, Dushock said the NFMA wants to give its members a chance to digest recent events in Detroit and Puerto Rico, which has also been spiraling down and recently saw its bond rating cut to junk level by the rating agencies. The federation will try to give members input from experts on those happenings, Dushock said.
"The NFMA is very aware of what's going on," she said. "We're hoping to bring in some academics, some think tank people."
Dushock also said she is interested in increasing the NFMA's student membership. The group created that membership category last year and it is open to full-time students enrolled in academic programs that prepare them for possible careers in municipal analysis. Dushock said the decision to create the category, which costs $50 per member annually, was not an easy one.
"It took a lot of debate and a lot of planning to create a student membership," she said. "The municipal bond industry is a special place to be. We want to get students to see that."
Lisa Good, NFMA's executive director, said the group plans to increase its overall membership as well. NFMA's membership has already grown more than 20% since 2008, Good said.
The NFMA also plans to continue to work collaboratively with other organizations with similar goals, such as the National Association of State Auditors, Comptrollers and Treasurers, the National Association of Independent Public Finance Advisors, and the Government Finance Officers Association, Good said.
Dushock and Good both said they are proud that NFMA for the first time has four women as officers. Franklin Templeton Investments vice president Jennifer Johnston is vice chair, while Municipal Market Advisors managing director Lisa Washburn is treasurer and Community Capital Management portfolio manager Julie Egan is secretary for this year. When Dushock's term as chair is up, she will serve next year as an advisor. Until then she said she has a very full schedule. "They've kept me very, very busy," she said.
