FISH AROUND: Steps to Issuing Charter School Bonds

Again it is really helpful to download the “how to” produced by Orrick, a leading bond counsel law firm.  Go here.

The following are the steps from Orrick’s primer to getting a charter bond deal completed.  Upcoming discussions will look at many of the specific steps with an eye towards where additional public disclosure or public input fits in the timeline.

• Consult Bond Counsel [dwelker comment: remember Orrick bills by the syllable to this naturally comes first in their list]

• Engage the Underwriter [the bank that will promote and sell the bond]

• Adopt Reimbursement Resolution [an act by the Charter School governing board]

• Determine with Bond Counsel and Underwriter what public entity will serve as Issuer of the Bonds [the issuing authority is the public office serving as a conduit for the schools to the markets]

• Bond Counsel prepares and circulates the initial draft of the Indenture and Loan Agreements [billable hours!]

• Charter Schools works with Underwriter or Disclosure Counsel to describe financial/operational information about Charter School [billable hours!]

• Underwriter’s counsel prepares and circulates initial draft of Bond Purchase Agreement [billable hours!]

• Conference calls to discuss document drafts [billable hours!]

• Draft documents are submitted to ratings agencies if applicable

• Another round of document review [billable hours!]

• Meeting of governing board of charter school to approve bond issue [first potential public notice through open meetings laws]

• Hearing on and approval of the Bonds by the Issuer [very important public hearing at Issuer]

• Meeting of the governing board of the Issuer to adopt bond resolution [potentially important decision point by Issuer; see an example here]

• Underwriter mails Preliminary Official Statement to potential purchasers of the Bonds [first broad public release of preliminary disclosure documents]

• Pricing of the Bonds

• Sale of the Bonds between the Issuer and Underwriter

• Preparation of final Official Statement

• Closing of the deal [purchasers of the bond register their holding with the Trustee bank]