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INDEPENDENCE
There is a growing recognition in the public finance sector that underwriters who market bonds to investors have an inherent unavoidable conflict of interest when they also work directly with borrower or issuers. For example:
"Some underwriters engage in the hopelessly conflicting practice of telling issuers that the underwriters place the interests of issuers first, even though the underwriters cannot do so due to obligations to investors and even though the dealers are acting as arm's-length principals under their bond purchase agreements."
"No serious participant in the municipal market believes a financial advisor can serve as an underwriter without engaging in direct conflicts of interest with the issuer. Actual and direct financial conflicts exist at numerous points in bond transactions:
a. In negotiating underwriter compensation…
b. In pricing of securities…
c. In structuring prepayment and other terms of the transaction…
d. In private or limited placements…
e. In negotiation of Bond Purchase Agreements…
f. In development of security provisions…"
National Association of Independent Public Finance Advisors, letter to Municipal Securities Rulemaking Board dated January 13, 2006
As members of the National Association of Independent Public Financial Advisors, Providence Financial holds to the highest ethical and professional standards. We exclusively defend the interests of our clients, the borrowers, in tax-exempt financing transactions. We get no compensation from underwriters or investors. Our advice and interests are solely with our client and have no conflict of interest in a transaction.
As a financial advisor we
- Lower interest costs
- Lower the cost of issuance
- Control the financing process in your behalf
- Assure market transparency
- Assure proper disclosure
- Provide unbiased advice
We are with you from the beginning to the end of your financing process!
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