Today, Bond Issuers, whether in the taxable or tax-exempt arenas, face a number of choices in the reinvestment of their bond proceeds. There are a number of important considerations when reinvesting bond proceeds which include: maximum flexibility in accessing funds, cashflow matching, credit quality and interest rate. In today’s market, traditional reinvestment approaches, such as dedicated Treasury portfolios, are being replaced by structured investment products employing innovative strategies. IMAGE is in continual contact with a vast number of Investment Providers of reinvestment products and is always on the cutting edge of new innovative ideas that are introduced into the marketplace. The combination of IMAGE’s experience and expertise will assist the Issuer with every phase of the process and provide the all the necessary reinvestment services.

The Value of IMAGE’s Bidding Agent Services to the Investment Provider Community

IMAGE, as the Independent Bidding Agent, performs a variety of valuable services to a multitude of Investment Agreement Providers in order for there to be a highly efficient and transparent market for the myriad of investment products in the tax-exempt reinvestment market.

• Communication:
  
  IMAGE provides the investment community with valuable information regarding timely issues developing in the municipal finance industry. This information includes the latest developments in financing structures, current trends in the marketplace, market information on the ever-changing ebb and flow of new issuance, and breaking developments on the regulatory front. IMAGE is an important liaison between the municipal finance professionals and the "derivative" investment professionals. Because of the high demands of each specialized field of expertise, IMAGE must be, and is the one who facilitates the necessary interaction of these two specialties.
  
  
• Experience:
  
  Even if an Issuer is a frequent participant in the competitive bidding of investments, it is unlikely that a Provider has more than one investment agreement with a particular Issuer due to the simple odds inherent from the competition. The one constant is often IMAGE, who can relate its experience with the Issuer and its other professionals. This valuable knowledge gained from experience will facilitate the process to minimize the chance of any mistakes and to streamline the bidding, negotiation and implementation of the Investment Agreement, so that the costs of the transaction are minimized and there is no need to "recreate the wheel" on every transaction.
  
  We believe this experience provides much of the same value even for first time Issuers. The financing professionals employed by the Issuer may have little or no experience in the investment of bond proceeds. The knowledge and experience of IMAGE is invaluable in this situation to insure that both sides of the investment, the Issuer and the Investment Provider, are comfortable with the product and that neither side was taken advantage of during the process.
  
  
• Preparation:
  
  Once a Provider (potential bidder) receives a package of information from IMAGE, it must conduct a thorough analysis of the structure of the investment being requested, the cash flows and economics of the proposed investment, and the credit quality and risk associated with that particular issue. IMAGE is a vital asset to the Investment Provider in all phases of their due-diligence.
  
  
• Structure:
  
  There are many, many types of investment agreements for all kinds of bond funds; construction, debt service reserve, escrows, debt service, sinking funds, etc. Within each type, there are countless variations based on factors particular to the Issuer, state law, local municipal law, and the individuals involved in the transaction. IMAGE must convey these nuances to the Investment Provider so the bid ultimately submitted incorporates all these factors.
  
  
• Economics:
  
  IMAGE, in conjunction with the financial advisor or underwriter, usually develops the cash flow schedules used for the bid. IMAGE shares their analytical insight with the Investment Provider so the economic integrity and accuracy of the bid is sound. The greater the uncertainty of any numbers, the greater contingency or reserve that must be built in by an Investment Provider, and therefore a lower yielding bid. By helping the Investment Provider take the "guess work" out of the bid, the Investment Provider is able to put forth a much more aggressive, higher yielding bid.
  
  
• Credit Evaluation:
  
  IMAGE provides a Preliminary Official Statement, audited financial information, credit reports, and any other relevant bond documents to prospective bidders. Based on this information, Investment Providers commence the review necessary to produce their bid. IMAGE coordinates questions from bidders and sends additional information as requested. This process is critical to the larger, more complicated financing structures and to the lesser rated credit Issuers to ensure that a sufficient number of bidders have approved the deal and that a full field of competent investment Investment Providers will be bidding on the investments, and that only the most reasonable credit reserve is built into their bids. Once again, by helping the Investment Provider take the "guess work" out of the bid regarding structure and credit, the Investment Provider is able to put forth a much more aggressive, higher yielding bid.
  
  
• Sale and Promotion of the Deal:
  
  In the time leading up to the competitive bidding of the investment, particularly on the day of the bid, IMAGE is in constant contact with the potential bidders. These investment firms are large, multifaceted corporations who are looking at dozens of transactions per day, both within the municipal reinvestment arena and in other forms of derivative investments. IMAGE is "in their face" to make sure that they have approved the credit, understand the structure of the deal, are comfortable with the cash flows, are prepared to bid on a timely basis, and want to win the deal by bidding an aggressive number. There is no shortage of business for these companies. We "sell them on the deal" so it is the most important thing they are working on and are totally focused on our deal. By motivating the bidders in this fashion, we are getting the best and highest yielding bids possible for that particular deal.
  
  
• Product Development:
  
  There has been a tremendous amount of product development and innovation in this field in the past ten years. IMAGE has played a significant role in the evolution of this business and the products offered in the market place. Their unique combination of product and market knowledge together with an in-depth understanding of the needs of the municipal Issuer have helped create products which much better serve the issuing community. Without this development, Issuers would be torturously limited in their choices of investment products. Many would choose to do nothing rather than invest in a product that they are not comfortable with. By doing nothing, and keeping the proceeds only in the shortest term, most liquid funds, it would significantly reduce the investment yield to many Issuers and most likely reduce or eliminate any rebate they may have owed to the Treasury from higher yielding investments.