| How does First River Advisory's disclosure philosophy benefit its clients? |
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- Completeness: An Appendix A prepared by First River Advisory frequently eliminates the need to supply investment analysts with supplemental information. That way, bond marketing activities are not hampered by having to continue to gather and circulate basic information.
- Presentation: First River Advisory presents the information in a clear, concise manner that facilitates analysis. For this reason, when faced with a stack of OS's to analyze, analysts will naturally gravitate toward one relating to a First River Advisory client.
- Beyond the Ordinary: First River Advisory has recently begun to preface the Appendix A with language concerning "forward-looking" statements which has been adapted from the corporate securities world, as presented below with respect to Chelsea Community Hospital.
This Appendix A contains forward-looking statements which are not historical facts. These statements include expressions of the management of Chelsea Community Hospital (the "Corporation") about the Corporation's organizational characteristics, existing and new facilities, services, programs and collaborative ventures, regulatory environment, competitors, market conditions, relationships, technology, demographic trends, operations, fundraising efforts, investment performance and financial condition. These statements are identified with such forward-looking terminology as "expect," "look," "believe," "anticipate," "may," "will" or similar terms or variations of such terms. Such forward-looking statements involve risks and uncertainties. Actual results may differ materially from such forward-looking statements. The Corporation assumes no responsibility for updating any such forward-looking statements. This Appendix A should be read together with the section of the Official Statement entitled, "BONDHOLDERS' RISKS" herein.
The inclusion of this statement provides a springboard to present an extensive array of "non-traditional" information which extends beyond the purely factual.
First River Advisory believes that these characteristics result in its clients' bonds receiving the attention they deserve. One analyst went so far as to characterize the Appendix A relating to the Garden City Hospital Obligated Group's Series 1998 Bonds as "an analyst's dream." Favorable comments have been received from other analysts, many of whom point to First River Advisory's documents as exemplary models for others to follow. Two bond analysts repeated such comments publicly, though anonymously, at the Spring 2000 conference of the National Council of Health Facilities Financing Authorities.
Continuing Disclosure
Even prior to the implementation of SEC Rule 15c2-12 in 1994 (and prior to the formation of First River Advisory), Shelley Aronson has been in the forefront of promoting the concept of continuing disclosure to his clients. To their credit, most clients have accepted the advice. Over the years, many institutional investors have come to recognize that compliance with the both the letter and the spirit of Rule 15c2-12 is a hallmark of First River Advisory clients.
An effective continuing disclosure program can produce the following benefits:
- If an organization's continuing disclosure program has distinguished itself from others, there will be greater demand for its next bond issue. For a $25 million, 30-year issue, a reduction of only one basis point can reduce total debt service costs by over $500,000.
- Because investors (like many others) do not like surprises, delivering "bad news" is less troublesome if the organization has made continuing disclosure a priority.
- Continual dialogue with investors provides a context for soliciting investor feedback on strategic planning initiatives.
First River Advisory acts as Dissemination Agent to assist several clients fulfill their continuing disclosure obligations. To underscore its commitment to this process, First River Advisory posts continuing disclosure information relating to several clients elsewhere on this website.
In 1999, First River Advisory prepared and submitted, on behalf of the National Association of Independent Public Finance Advisors, comments on an exposure draft of the National Federation of Municipal Analysts' Recommended Best Practices in Disclosure for Hospital Transactions. Shelley Aronson appeared on a panel at the Municipal Securities Rulemaking Board's Forum on Hospital Finance Disclosure, held on March 13, 2000, in New York City.
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