CHICAGO — Investor outreach has become increasingly important as issuers continue to struggle with fiscal and market challenges, said panelists at the Women in Public Finance conference here Thursday.
“In the old days, in the old tax-exempt world, we had an investor outreach program but it wasn’t very big and it wasn’t the priority it is today,” said California deputy treasurer Katie Carroll. “We’ve really stepped up our investor outreach and education effort. Every sale, we spend a solid two days on the phone, and for one of our [Build America Bond] transactions where we expanded our [investor] base, we spent five solid days on the phone.”
“We haven’t done a lot of big investor conferences,” she added. “We don’t find that that works nearly as well in today’s environment, when investors want a more personal touch.”
Education efforts have also become more important as federal stimulus programs have attracted more retail investors and taxable debt buyers to the municipal world.
“There’s lots of retail investors who don’t know much about munis,” said J. Pari Sabety, director of the Ohio Office of Budget and Management. “We’re in a very strange place in terms of how we’re educating people. There’s a conflict between the truth of being concerned about the true bleakness of the fiscal condition issuers are facing and hysteria.”
Chicago Public Schools is in the processing of enhancing its investor outreach program, said Diana Ferguson, CPS chief financial officer. “Because of this blending of the investor bases, it’s incumbent upon us as issuers to expand that outreach and education,” Ferguson said. “With technology now it’s a lot easier to get your story out.”
Like many issuer officials, the panelists disputed claims by the Securities and Exchange Commission that municipal disclosure is lacking, particularly when compared with the corporate market.
“Disclosure is important — there’s no question that investors need that information,” said Karen Walker, chief financial officer and executive vice president of the Chicago Transit Authority. “But I believe the disclosure that the municipal market offers is adequate and above and beyond the corporate market.”
Carroll said California has relied on borrowing to stimulate growth over the past few years amid high unemployment. “We issued about $29 billion over the past couple years, and that’s meant a significant number of jobs of California,” she said. “Our bond issuance will go down somewhat — we won’t see $29 billion over the next two years but will stay high, in the $11 billion to $14 billion range per year, and that will continue to be one of the ways we will stimulate job growth.”
More than 400 people attended the 14th annual Women in Public Finance conference, held at the Standard Club in downtown Chicago.
The post-lunch keynote presentation featured “Washington Week” moderator Gwen Ifill, longtime Democratic strategist Donna Brazile, and former Maryland Lieut. Gov. Kathleen Kennedy Townsend.