An Essex County senator would like New Jersey to follow New York’s example and bring more minority- and women-owned investment firms into Garden State bond transactions at the senior manager level.
Sen. Ronald Rice has filed legislation that would require state entities that issue debt to review “the opportunity and compensation of qualified minority- and women-owned financial institutions to serve as senior managing underwriters for such transactions,” according to the bill.
Local governments and authorities would submit reports to the Legislature and the Treasury Department. If the state treasurer finds “gross statistical disparities in utilization and compensation,” the department would then establish goals to help increase the use of minority- and women-owned investment banks as senior managers and set compensation goals.
Last year, a special task force in New York created a new request-for-proposal process to help smaller investment firms secure senior manager positions on state-backed bond transactions. Empire State officials are now reviewing RFP processes for bond counsel and financial advisers.
In respect to creating senior underwriting opportunities for minority- and women-owned businesses, “New York is doing a much better job under [Gov. David Paterson] and what they’ve put together,” Rice said. “And so I’ve been paying attention to what they’re doing and trying to get some of those changes over here.”
New Jersey’s Treasury Department is in the midst of revamping its underwriting pools, including its senior manager team. Proposals were due last week.
During the past five years, JPMorgan has topped the list of senior managers of state-level borrowing, underwriting $13.6 billion of debt, according to Thomson Reuters.
Morgan Stanley and UBS Securities LLC follow with $7.5 billion and $5.7 billion of debt, respectively. Bank of America/Merrill Lynch has worked on $5.5 billion and Citi comes in fifth with $4.1 billion of debt sales.