The refunding debt will be a long-term obligations of the City and considered a debt security. The financing team has developed the Preliminary Official Statement (POS). The POS is the document used by the issuer to give information about the price of the bond, the maturity date, interest rate, and all other important information to potential buyers.
The City is responsible for including information within the POS that reasonable investors would consider to be important in making an investment decision. This information includes relevant financial and operating information as well as legal and tax considerations. The POS includes how the City plans to repay the debt.
As part of the transaction, the City will be making disclosers in compliance with the antifraud provisions of the Securities Act of 1933 and Rule 10b-5 of the Securities Act of 1934. Primary market disclosure practices for municipal securities have developed as a result of these antifraud provisions, federal regulation of broker-dealers through the Securities and Exchange Commission (SEC) Rule 15(c)2-12, and other regulations of market participants by the Municipal Securities Rulemaking Board (MSRB).
The governing body is urged to review the POS and be aware that Federal antifraud laws prohibit making material misstatements or omissions of material facts if those facts are necessary to avoid a misleading statement. If the City fails to comply with these disclosure requirements the City may be subject to regulatory actions and/or monetary fines.