Capital Formation   Print E-mail


In advising clients on capital formation matters, First River Advisory typically engages in a comprehensive approach on behalf of its clients, subject to the specific needs and expectations of each particular client. The description below provides a generalized picture of this approach — the specific actions we take for each client may vary.


To be an effective partner in an organization's capital formation process, First River Advisory first takes the time to gain fundamental knowledge of the organization's

  • objectives for the capital formation process;
  • characteristics, business environment and strategy;
  • financial position and recent financial performance;
  • constraints and opportunities with respect to outstanding debt instruments;
  • legal structure of the outstanding debt instruments; and
  • tolerance for risk.

At this juncture, the capital formation process would follow an efficient path toward the achievement of the client's stated objectives. This path is adapted to fit goals and objectives relating to project financing, to refinancing or to some combination.

First River Advisory routinely takes a comprehensive, "leave no stone unturned" approach to its financial advisory engagements. First River Advisory typically charges fixed fees so that there is no financial incentive for us to "churn the account" and bill more hours. Nobody likes fee surprises, so even when unforeseen issues arise, as they invariably do, First River Advisory addresses them with no additional compensation beyond the agreed-to fixed fee, as long as the issues are moderate in scope and complexity.


In general, First River Advisory identifies, researches and evaluates various alternative capital formation approaches that promote the client’s objectives. These alternatives take into account the client's preferences, risk tolerance, constraints and opportunities (Client Factors). Contemporaneously, First River Advisory identifies various capital financing approaches and alternatives (Financing Products) which, singly or in combination, represent viable and suitable solutions. Financing Products often include, but are not limited to:

  • tax-exempt or taxable bonds to be offered publicly by a securities broker dealer;
  • tax-exempt bonds to be purchased directly by one or more banks or other, non-bank financial institutions;
  • loans and/or guarantees from the U.S. Department of Agriculture, Department of Housing and Urban Development or other federal agencies; and
  • conventional term loans and other bank credit facilities.

First River Advisory then develops Financing Alternatives from fusing Client Factors with Financing Products, and evaluates the advantages, disadvantages, costs, risks and implementation factors associated with each such Financing Alternative. Upon the selection of one of the Financing Alternatives by the client’s governing board, the selected Financing Alternative then becomes the definitive Financing Plan.


The cost, if not the viability of Financing Products is typically highly dependent on the client's credit quality. The credit quality of most of First River Advisory's clients has been weaker than average. Consequently, close attention to the preparation of presentations of credit information have been crucial to the success of their financings.

Unlike many other investment bankers and financial advisors, First River Advisory relieves the burden on its clients by preparing presentations of credit information, a major endeavor, from raw data and other "off the shelf" information. Where relevant, these presentations of credit information can evolve into the disclosure sections (usually "Appendix A") of Official Statements in connection with public offerings of bonds. A well-organized, exhaustive and well-written Appendix A can make a meaningful difference in challenging market conditions.


Shelley Aronson has provided the linkage between capital financing and project development since 1980. During his tenure at the New York State Medical Care Facilities Finance Agency (MCFFA, an active hospital bond issuer at the time), he was responsible for transforming the cost estimates and timetables produced by architects and construction managers into bond and loan sizing schedules. He frequently attended construction progress meetings and approved monthly loan advances for construction costs and change orders. As an investment banker and later while the principal of First River Advisory, Mr. Aronson actively participated in numerous construction project planning meetings, mainly to ensure the integrity of the project budget and its impact on a project's affordability. While attending one such meeting in 2011, he suggested that a pneumatic tube system incorporated by architects into a hospital expansion project was "20th century technology," First River Advisory's client agreed and eliminated it, saving an amount in excess of First River Advisory's financial advisory fee.


As the leader of the financing team, First River Advisory coordinates the activities of other professionals and governmental organizations which need to be involved in the issuance of tax-exempt bonds or other debt instruments. First River Advisory understands the roles played by other financing team members so that leadership can be exerted effectively. That knowledge enables First River Advisory to set timetables and workplans so that clients' objectives can be achieved efficiently. Moreover, First River Advisory demands accountability, and ensures that other financing team members deliver quality, timely service; First River Advisory has recommended replacement of financing team members when warranted. Because financing teams include diverse and sometimes adversarial members (i.e., clients and bond underwriters), First River Advisory pro-actively builds consensuses and finds workable and lasting solutions without compromising clients' interests. First River Advisory ensures that client representatives understand the financing process and are prepared for upcoming events. First River Advisory presents issues, together with analyses and recommendations, to its clients' governing board and management in a manner that facilitates decision-making. Many of the executives of First River Advisory clients, though highly experienced, had not been involved in a bond issue previously, and were apprehensive about the process. First River Advisory's leadership, coordination skills and attention to detail were instrumental in relieving their burdens and streamlining these inherently complex transactions.

In general, the scope of Transaction Advisory services provided by First River Advisory encompasses all activities necessary to guide and advise its clients so that their selected Financing Plans can be implemented efficiently, in a timely manner, and in concert with other organizational objectives. Sometimes multiple transactions are necessary. Transaction Advisory services provided by First River Advisory during its financial advisory engagements frequently include the following, adapted to fit the specifics of the selected Financing Plan:

  • cultivation of sources of credit;
  • solicitation and evaluation of proposals to deliver the requisite Financing Products which have been specified in the Financing Plan;
  • organization of the remaining members of the financing team, including the solicitation of proposals so that roles can be filled in a cost-effective manner;
  • establishment and maintenance of financing timetables that outline key events, milestones, deadlines and responsibility assignments, and recognize project planning and design and engineering processes, possible upcoming changes in regulatory environments, outlooks for interest rates and the needs of the market in terms of lead time, and supply and demand conditions;
  • input to capital financing and other relevant sections of Certificate of Need applications;
  • review and comment on project cost schedules and other design, architectural, engineering and construction considerations;
  • assistance in resolving development issues relating to construction projects;
  • production of debt capacity analyses, bond issue sizings, debt service schedules and other quantitative analyses;
  • analyses and recommendations as to debt/equity mix options;
  • evaluation of other sources of equity, such as fund-raising campaigns and securitization of real estate assets;
  • coordination of the debt issuance on the liability side of clients’ balance sheets with the activities of their investment managers with respect to the asset sides of balance sheets;
  • preparation of debt service schedules and other input necessary for the preparation of financial projections by clients' management and/or consultants, along with the review and comment on the output;
  • organization of information to be presented to qualified bond issuing authorities in connection with requisite approval processes;
  • maintenance of relationships and, when necessary, negotiations with clients' existing investors, lenders and credit providers;
  • coordination between/among multiple investors and/or lenders;
  • preparation of project descriptions for use in applications, presentations and documents delivered to potential investors, lenders and others;
  • collection and analysis of data available through various federal, state and local governmental agencies and industry associations;
  • organization of Presentations of Credit Information which, with appropriate modification, can be used in applications and presentations to banks, bond insurers, rating agencies and institutional investors, and in the disclosure section (Appendix A) of a securities offering document;
  • assembling of information needed for applications to government-related direct loan and financial guaranty programs;
  • negotiation of terms, conditions and covenants with underwriters, direct bond purchasers, lenders, bond insurers, rating agencies, institutional investors and/or other sources of credit;
  • coordination of the preparation of drafts of financing documents and bond resolutions, legal opinions and bond purchase agreements, review and comment with respect to such documents, and the negotiation of terms, conditions and covenants contained therein on clients' behalf;
  • assistance with and coordination of the preparation of securities offering documents, and the negotiation of terms, conditions and covenants contained therein on clients' behalf;
  • assistance to clients’ internal and external legal counsel in a variety of ways;
  • assistance with obtaining governmental approvals needed in connection with the issuance of any new debt instruments;
  • negotiations of terms, conditions and covenants with investors and/or other sources of credit;
  • coordination of the activities of the managing underwriter(s) and oversight of securities' pricing in connection with negotiated sales of securities;
  • leadership of activities such as the publications of notices of sale, openings of bids, awards of securities, and, if warranted, operations of one or more Internet-based bidding systems in connection with competitive sales of securities;
  • implementation of advance refunding alternative processes;
  • solicitation of bids for or otherwise arrangements for the purchase of securities necessary to fund redemption escrows in connection with certain refundings;
  • collaboration with Bond Counsel to fine-tune the precise types of securities that may be used to fund redemption escrows;
  • arrangement for (but not performance of) mathematical verifications of sufficiencies of redemption escrows;
  • arrangement for escrow agents with respect to redemption escrows;
  • supply of data to Bond Counsel in connection with its drafting of tax certificates;
  • arrangement for the delivery of legal opinions regarding the redemption of outstanding debt instruments;
  • arrangement of any interest rate management products; and
  • coordination of all activities relating to closings transactions.
First River Advisory, Capital Formation and Debt Management Solutions for Health Care Organizations
About FRA
Case Studies
Contact Us
Webiste managed by Merge Analytics, LLC - Leesburg, FL