The New Jersey Educational Facilities Authority is seeking requests for qualifications to provide it with post-issuance analysis for tax-compliance issues.
The NJEFA, which serves as a conduit issuer for New Jersey public and private colleges and universities, plans to review all of its outstanding debt sales and then update that analysis each year, according to the RFQ.
Responses are due by July 8. Invited firms may then participate in a request for proposal process.
The authority is looking to select one or more firms to review bond sales. This will begin a new post-pricing review initiative that uses outside advisers.
“The authority intends to implement a program of post-issuance review of the authority’s bonds by one or more qualified providers in order to assure the authority’s ability to demonstrate compliance with federal tax requirements,” the RFQ reads. “The authority intends that the review will be conducted for each borrower on an issue by issue basis.”
Executive director Roger Goodman said in an e-mail that the program will include review of both tax-exempt and taxable debt. He mentioned that the recent focus on pricing analysis of taxable Build America Bonds is not the only reason for the RFQ. The NJEFA has been making post-issuance analysis more of a priority “for a few years now,” he said.
The taxable BAB program is part of the American Recovery and Reinvestment Act. The securities offer borrowers a federal subsidy on interest costs. The Internal Revenue Service earlier this month said it could audit some BAB deals as it is concerned that some of the bonds may be pricing too high in the primary market.
Interested parties must have experience representing issuers and borrowers in connection with IRS examinations and compliance inquiries, reviewing and analyzing use and allocation of bond proceeds, and capability of providing opinions either directly or through another firm or law firm, according to the RFQ.
Firms will review the use and allocation of bond proceeds, analyze debt issues for IRS compliance, and calculate the amount of private business use within developments financed with bond proceeds, among other services.
Since 2000, the NJEFA has sold $8.27 billion of long-term debt on behalf of higher educational institutions in the state, according to Thomson Reuters.
In other news, the authority Tuesday elected new public members to its five-member panel, each for a one-year term. Labor attorney Roger Jacobs, who has been a member of the agency since 2003, will serve as chairman. He is a managing partner at Jacobs Rosenberg LLC.
Ridgeley Hutchinson will serve as vice chairman. Hutchinson is a business representative of the New Jersey Council of Carpenters. Joshua Hodes is the panel’s treasurer. Hodes is chief of staff to Assembly Majority Leader Joseph Cryan, D-Union.
State Treasurer Andrew Eristoff and South Jersey Industries president and chief executive officer Edward Graham, who is also chairman of the New Jersey Commission on Higher Education, are ex-officio members of the authority.