CHICAGO — Wisconsin is asking financial advisory firms interested in helping the state evaluate its assets for possible sale or lease to submit their qualifications by Nov. 1.
The two-year budget signed by Gov. Scott Walker earlier this year included a provision allowing for the evaluation of state assets for sale or lease. “The state intends to review and evaluate all state-owned assets for possible sale, including but not limited to, heating plants, telecommunications, excess property, and underutilized assets,” the RFQ posted on the state’s capital finance office website reads.
“A goal of the potential sale or other disposition of assets is to reduce potential liabilities and other risks the state may be subject to with respect to certain assets, provide positive impact on the state’s balance sheet, and reduce state debt,” it continued.
The State Building Commission and the Legislature’s Joint Committee on Finance must sign off on any future deals. The RFQ is an open solicitation for all firms interested in providing the state with general financial advisory services related to evaluating the potential sale or lease of assets.
The RFQ notes that the state is not seeking brokerage services and that any firm awarded the advisory work is barred from competing for brokerage work on an asset-related deal but not from future state bond deals. The state may also issue future RFQs related to advisory services for proposed asset sales and the firm or firms chosen to advise on the evaluation can compete for that future work.
Proceeds from any sale must first go to retire debt associated with the asset and so “a critical component in the evaluation of assets for sale relates to the retirement of debt,” the RFQ noted. Assets that could potentially be sold have outstanding bonds and notes associated with them that have varying call options.
The advisor or advisors selected are expected to provide wide-ranging services that span identifying assets, valuation and financial analysis on a sale, debt retirement, advice on contracts, assistance in establishing best practices and procedures to follow, and an examination of alternative options. The advisors would be responsible for compiling reports on a proposed sale that includes a cost-benefit analysis, recommendations on terms, and the budgetary impact.