“Bank loans” are a particular type of municipal finance transaction that could, depending on the nature of the transaction, be a private placement of municipal securities and therefore subject to specific regulatory requirements. With private placements of municipal securities on the rise, it is critical that municipal advisors to state and local governments determine whether their activities require registration as a broker with the Securities and Exchange Commission and the MSRB to avoid inadvertent violations of relevant securities laws.
Read the MSRB’s press release and regulatory notice on the potential applicability of MSRB rules to bank loans.
Because determining whether these products are loans or securities is not a straightforward analysis, the MSRB has encouraged the SEC to provide further guidance on this issue.
Disclosure is another important aspect of bank loans undertaken by state and local governments. When a state or local government voluntarily discloses the existence of a bank loan, it makes available to potential investors and other market participants key information that may be useful in their municipal securities portfolio assessments.
The MSRB has encouraged state and local governments to disclose bank loan financing information through the MSRB’s Electronic Municipal Market Access (EMMA®) website.
Read the MSRB’s press release and regulatory notice encouraging state and local governments to disclose bank loan financing information.