Current through Reg. 50, No. 249, December 24, 2024
(1) Bonds shall
be sold at public sale at such place or places within the State as the
Governing Board shall determine to receive proposals for the purchase of such
Bonds. Notice of such sale shall be published at least once at least 10 days
prior to the date of sale in one or more newspapers or financial journals
published within or without the State and shall contain such terms as the
Governing Board shall deem advisable and proper under the circumstances;
provided, that if no bids are received at the time and place called for by such
notice of sale, or if all bids received are rejected, such Bonds may again be
offered for sale upon a shorter period of reasonable notice provided for by
resolution of the Governing Board.
(2) All proposals for the purchase of any
Bonds offered for sale by the Division shall be opened in public. By resolution
of the Division, such Bonds shall be awarded to the lowest Bidder. The basis of
award may be either the lowest net interest cost or the lowest true interest
cost, as set forth in the resolution authorizing the issuance or sale of the
Bonds. The Secretary, or an Assistant Secretary, of the Governing Board is
hereby authorized to award the Bonds and such award shall be final without any
further action required by the Governing Board. Further, pursuant to Section
215.68(5)(b),
F.S., the Secretary or an Assistant Secretary of the Governing Board is
authorized to reject all bids received and such rejections shall be final
without further action required by the Governing Board. The Director of the
Division shall report the results of the award of the Bonds or the rejection of
all bids received at the next meeting of the Governing Board.
(3)
(a)
Notwithstanding the provisions of subsections (1) and (2), in the event the
Governing Board determines by resolution that a negotiated sale of bonds is in
the best interest of the state, and the Governing Board has approved the form
and substance of the purchase contract except for any details unique to the
particular issue of bonds, the Director or Secretary or any Assistant Secretary
of the Governing Board is authorized to negotiate and execute a purchase
contract for the sale and award of the bonds, without further action by the
Governing Board, subject to any restrictions set forth in the resolution
authorizing the negotiated sale. In making a determination that the negotiated
sale of bonds is in the best interest of the state, the Governing Board shall
provide in the resolution authorizing the negotiated sale specific findings of
the reasons requiring the negotiated sale and the basis for the specific
findings. In making such specific findings, the Governing Board shall consider
the following factors:
1. Unstable market
conditions which require the flexible pricing or the precise timing of the sale
of the bonds to a degree which would not be expected through a competitive
sale;
2. Concerns regarding the
credit quality of the state, the agency for which the bonds are being issued,
or any source of revenue pledged to the bonds which require more extensive or
aggressive marketing of the bonds than would be expected through a competitive
sale;
3. An unusually large bond
issue which, if sold at competitive sale, would require the formation of larger
than usual underwriting syndicates resulting in the expectation of fewer bids
than would be necessary for sufficient price competition;
4. A bond issue for a new entity or a new
program which would require more extensive or aggressive marketing of the bonds
than would be likely through a competitive sale;
5. Use of an innovative or unusual structure
or security which would require the underwriting of the bonds in a manner not
likely to be available in a competitive sale; and
6. Changes or anticipated changes in laws or
regulations which would make the prompt sale of the bonds
desirable.
(b) Prior to
the pricing of the bonds in a negotiated sale the Division shall have retained
the services of a financial advisor who shall, at a minimum, review and advise
the Division as to the reasonableness of the timing of the sale, the gross
underwriting spread and the price of the bonds. Immediately subsequent to the
sale of the bonds the financial advisor shall provide a written opinion
concerning the fairness or reasonableness of the timing of the sale, the gross
underwriting spread and the price of the bonds.
(c) On or before the time that the Governing
Board authorizes the sale of bonds by a negotiated sale, the Governing Board
shall determine: the percentage distribution of the management fee among
underwriters; the percentage of participation among underwriters; and any
special instructions regarding the distribution of bonds, which determinations
and instructions shall be binding upon the underwriters. In addition, if
requested by the Division, the underwriters shall be bound by the following:
1. When there are three or more underwriters
selected by the Governing Board, all designated orders must be filled by a
minimum of three underwriters designated by the purchaser of the bonds and no
one underwriter may receive more than 50% of any individual designated
order.
2. During the order period,
the senior bookrunning underwriter shall provide the following information to
the Division on a continual basis, as soon as it becomes available: the size
and type of the orders received, the name of the underwriter placing the order
and the purchaser of the bonds, and the time of receipt of each
order.
(4)
(a) In the event the Division negotiates the
sale of bonds, the senior bookrunning underwriter shall provide to the Division
at least five business days, unless a shorter time period is approved by the
Director of the Division, prior to the award of such bonds to the bond
underwriters, a disclosure statement containing the following information:
1. The names, addresses, and estimated
amounts of compensation of any finders connected with the issuance of the
bonds.
2. An estimate of:
a. Any expense component of the gross
underwriting spread.
b. Any
management fee component of the gross underwriting spread.
c. Any takedown component of the gross
underwriting spread.
d. Any risk
component of the gross underwriting spread.
For purposes of sub-subparagraph 2.a. above, the senior
bookrunning underwriter must also provide an itemized list setting forth the
nature and estimated amounts of expenses to be incurred by the bond
underwriters in connection with the issuance of such bonds. Notwithstanding the
foregoing, any such list may include an item for miscellaneous expenses,
provided it includes only minor items of expense which in total shall not
exceed more than $2, 500 and which cannot be easily categorized elsewhere in
the statement.
3.
Any other fee, retainer, bonus, or compensation estimated to be paid by the
bond underwriters in connection with the bonds issued to any person not
regularly employed or retained by it.
4. The name and address of each underwriter
in the syndicate or selling group for the bonds.
(b) At least three business days, unless a
shorter time period is approved by the Director of the Division, prior to the
pricing of the bonds in a negotiated sale, the Division and the underwriters
must reach final agreement on:
1. The expense
component of the gross underwriting spread; provided that in the negotiation of
the expense component of the gross underwriting spread, the Division will not
consider any expenses for underwriter's legal counsel which exceed the amount
to be paid to bond counsel by the Division for the bond issue, unless an
increased amount is authorized by a vote of the Governing Board due to
extraordinary circumstances such as unusual complexity of the bond issue;
provided, however, that this provision should not be construed to limit in any
way the compensation paid by the underwriter to underwriter's counsel,
2. The management fee component of
the gross underwriting spread,
3.
The maximum amount for the takedown component of the gross underwriting spread,
4. The maximum amount for the risk
component of the gross underwriting spread, and
5. The level of participation by each of the
underwriters involved in the transaction.
(5) The Director of the Division shall report
at a meeting of the Governing Board the results of a negotiated sale and award
of the bonds or the reasons the Division was unable to negotiate a sale. If a
negotiated sale is made the report shall include, at a minimum:
(a) The price of the bonds,
(b) The allocation of the bonds and an
explanation of the gross underwriting spread, and
(c) The actual or estimated amount of all
fees paid by the Division including, but not limited to, the fees of bond
counsel and any financial advisor.
(6) No violation of any provision of this
section shall affect the validity of any bond issue.
Rulemaking Authority
215.62(5) FS.
Law Implemented 215.68(5)(b),
(c)
FS.
New 3-27-84, Formerly 13K-3.03, Amended 10-8-90, 12-3-91,
Formerly 13K-3.003.
