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HFA Initiative Settlement Process

1. Agenda. Special Advisor RolePre-Settlement RequirementsHFA Bond Settlement (12/30)GSE Bond Settlement (1/12)Contact InformationQuestions. 2. In order to ensure the successful settlement of the Program Bonds and the GSE Securities, HFA Special Advisors must do all things necessary to

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HFA Initiative Settlement Process

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    1. HFA Initiative Settlement Process December 30th /January 12th Securitization December 15 1:00 PM

    2. 1 Agenda Special Advisor Role Pre-Settlement Requirements HFA Bond Settlement (12/30) GSE Bond Settlement (1/12) Contact Information Questions

    3. 2 In order to ensure the successful settlement of the Program Bonds and the GSE Securities, HFA Special Advisors must do all things necessary to register the Program Bonds with DTC so they can be settled, released and credited to the Closing Agent on the pre-settlement day. The Special Advisor may be any experienced party able to successfully perform the duties detailed in the Placement and Settlement Agreements with regard to properly setting up and processing bonds through DTC. Despite the fact that an HFA’s Program Bonds will not be traditionally underwritten or placed by an investment bank, an investment bank is generally skilled and experienced in performing the duties required of the Special Advisor under this Program. Similarly, a qualified Financial Advisor may routinely and customarily perform the duties required of the Special Advisor within this Program. The Special Advisor will provide a UW Source spreadsheet to US Bank instead of providing the Eligibility Questionnaire to DTC. US Bank will register the program bonds with DTC and US Bank will be listed as the ‘Lead Underwriter’ on the DTC System. HFAs that are issuing Market Bonds should follow their normal process for the issuance of Market Bonds (i.e. those bonds should not be included in the UW Source spreadsheet). Special Advisor Role Successful settlement of the HFA Program Bonds and the GSE Securities will depend on the deposit of the HFA bonds into the DTC book entry system so that the HFA bonds are settled, released and credited to the participant account of U.S. Bank National Association (as the “Closing Agent” under the Settlement Agreement) at DTC by no later than 1:00 pm, Eastern time, on the pre-settlement day. We believe that broker-dealers (investment bankers) are skilled and experienced in performing this function and that each HFA must engage a banker to assure that its bonds are processed through DTC in time. Successful settlement of the HFA Program Bonds and the GSE Securities will depend on the deposit of the HFA bonds into the DTC book entry system so that the HFA bonds are settled, released and credited to the participant account of U.S. Bank National Association (as the “Closing Agent” under the Settlement Agreement) at DTC by no later than 1:00 pm, Eastern time, on the pre-settlement day. We believe that broker-dealers (investment bankers) are skilled and experienced in performing this function and that each HFA must engage a banker to assure that its bonds are processed through DTC in time. Successful settlement of the HFA Program Bonds and the GSE Securities will depend on the deposit of the HFA bonds into the DTC book entry system so that the HFA bonds are settled, released and credited to the participant account of U.S. Bank National Association (as the “Closing Agent” under the Settlement Agreement) at DTC by no later than 1:00 pm, Eastern time, on the pre-settlement day. We believe that broker-dealers (investment bankers) are skilled and experienced in performing this function and that each HFA must engage a banker to assure that its bonds are processed through DTC in time. Successful settlement of the HFA Program Bonds and the GSE Securities will depend on the deposit of the HFA bonds into the DTC book entry system so that the HFA bonds are settled, released and credited to the participant account of U.S. Bank National Association (as the “Closing Agent” under the Settlement Agreement) at DTC by no later than 1:00 pm, Eastern time, on the pre-settlement day. We believe that broker-dealers (investment bankers) are skilled and experienced in performing this function and that each HFA must engage a banker to assure that its bonds are processed through DTC in time.

    4. 3 Pre-Settlement Requirements

    5. 4 HFA Bond Settlement (12/30/2009)

    6. 5 GSE Bond Settlement (1/12/2010)

    7. 6 Contact Information USBank Email the Official Statement and the UW Source spreadsheet to US Bank at usbhfa@usbank.com to facilitate loading bonds onto DTC. For questions related to the spreadsheet please contact: David Massa NY Corporate Trust Manager U.S. Bank Corporate Trust Services 100 Wall Street, Suite 1600 New York, NY 10005 Phone (212) 361-4386 Fax (212) 809-4993 Email: david.massa@usbank.com DTC Tracy Barnes The Depository Trust and Clearing Corporation Southern Business Center Supervisor- Underwriting Eligibility Office: 813 470-1049  Fax: 813 470-1037 E-mail: tbarnes@dtcc.com For questions related to the Letter of Representation please contact: The DTC “Letter of Reps” Hotline at (866) 724 – 4402 Option 3 Fannie Mae & Freddie Mac Please contact your assigned Deal Manager

    8. 7 Questions... Q&A An HFA’s Program Bonds will not be traditionally underwritten by a banker. No banker will be executing a bond purchase agreement for the Program Bonds, earning a spread on or selling Program Bonds. We did not wish to call your banker an underwriter or to require or imply that your banker was performing such a role. If you are issuing Market Bonds at the same time as the Program Bonds, we understand that your banker is likely to be the underwriter of those bonds. Issuers are required to issue an Official Statement for the Program Bonds and that, among other things, the GSEs receive a 10b-5 opinion with respect to the Official Statement from counsel to the “Special Advisor.” In a customary underwriting, your underwriter will have special duties with respect to the Official Statement and that its counsel will provide an opinion regarding the Official Statement. For the Program Bonds, your banker will not be performing an underwriting function, but we still expect your banker to assist you in the preparation of the Official Statement. We do not look to your banker to give us advice with respect to Official Statement or the suitability of the Program Bonds, but still wish to have the comfort of counsel’s opinion. We understand that your practice may be to engage a financial advisor with respect to your issuance of bonds generally and that you may be doing so for the Program Bonds. We recognize that financial advisors may be independent firms or individuals or may be a banker as we have defined it above. We do not wish to discourage you from hiring the services of an independent financial advisor if that is your customary practice. An HFA’s Program Bonds will not be traditionally underwritten by a banker. No banker will be executing a bond purchase agreement for the Program Bonds, earning a spread on or selling Program Bonds. We did not wish to call your banker an underwriter or to require or imply that your banker was performing such a role. If you are issuing Market Bonds at the same time as the Program Bonds, we understand that your banker is likely to be the underwriter of those bonds. Issuers are required to issue an Official Statement for the Program Bonds and that, among other things, the GSEs receive a 10b-5 opinion with respect to the Official Statement from counsel to the “Special Advisor.” In a customary underwriting, your underwriter will have special duties with respect to the Official Statement and that its counsel will provide an opinion regarding the Official Statement. For the Program Bonds, your banker will not be performing an underwriting function, but we still expect your banker to assist you in the preparation of the Official Statement. We do not look to your banker to give us advice with respect to Official Statement or the suitability of the Program Bonds, but still wish to have the comfort of counsel’s opinion. We understand that your practice may be to engage a financial advisor with respect to your issuance of bonds generally and that you may be doing so for the Program Bonds. We recognize that financial advisors may be independent firms or individuals or may be a banker as we have defined it above. We do not wish to discourage you from hiring the services of an independent financial advisor if that is your customary practice.

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