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Michigan Finance Authority








 

Michigan Finance Authority
$3,323,000,000
Unemployment Obligation Assessment Variable Rate Demand Revenue Bonds, Series  2011
With our co-financial advisor, R.W. Baird, FirstSouthwest:
  • Created a cash flow model to analyze the effects of changes in key assumptions, including employment, wage base, benefit payment, SUTA revenues, alternate revenue streams, and structure and term of bond financing. In all cases, each cash flow run generated both a “capital markets solution” scenario and a “status quo” scenario to permit side by side comparisons of outcomes, including the impact on employers.
     
  • Provided advice and input on at the development of legislation that would take advantage of lessons learned through the Texas Public Finance Authority UI financings.
     
  • Generated additional cash flow modeling that was utilized to answer questions from legislators or to illustrate points in presentations made to various house and senate committees with jurisdiction over the legislation at various stages in its evolution.
     
  • Helped draft the RFP for underwriters that encouraged respondents to offer short term or interim financing solutions that would permit a 2011 payoff of the outstanding FUA loan balance prior to December 31, 2011.
     
  • Assisted in the analysis of the responses to the Underwriter RFP; the selection team picked Citigroup as the underwriter and remarketing agent for a variable rate demand bond financing to repay the federal loan. Citibank provided the Letter of Credit for the transaction, which closed on December 28, 2011.
It is expected that the variable rate demand bonds will be refunded into a fixed rate transaction upon receiving long-term rating in 2012.
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