The New Jersey Educational Facilities Authority is looking for financial advisory services for a one-year period with an option to renew for a second year.
Responses to the authority’s request for proposals are due by May 20 at 12 p.m. Officials aim to present one or more firms to its board members for consideration at the agency’s June 22 board meeting, said executive director Roger Anderson.
The authority serves as a conduit issuer for higher education institutions. The EFA may select one financial consultant or multiple advisers, depending upon submissions.
Anderson said having more than one adviser has worked well in the past.
“We’ve done well when we’ve had a pool,” he said.
The authority’s previous contract with Public Financial Management Inc., Acacia Financial Group Inc., and Phoenix Advisors LLC ended in the fall. Since then, the EFA has been using financial advisers on a deal-by-deal basis.
The RFP asks that interested applicants present quantitative and qualitative approaches to pricing call options, especially with taxable Build America Bonds, and provide analysis on recent transactions, including programs used for pricing options.
“This time the new question is on option pricing, particularly for BABs, because buying a call option is a lot more expensive with BABs than it is with tax-exempts,” Anderson said. “And we want to see some quantitative analysis from our financial adviser on whether or not the price is worth it.”
The RFP asks for details of prior experience with college and university debt, “challenged credits,” derivative products, and auction-rate and variable-rate securities.
In addition, the authority is seeking information on how real-time reporting of secondary market activity could help it at pricing.
Officials are currently working on a $30 million bond sale on behalf of New Jersey City University that may include both tax-exempts and BABs.
The Educational Facilities Authority anticipates pricing that deal next month with Citi as book-runner.