The Handbook of Municipal Bonds

CHAPTER 6

The Role of Counsel to the Underwriters

Mary G. Wilson, Esq. Partner Sonnenschein Nath & Rosenthal LLP

 

 

 

In recent years the growth in securities laws and scrutiny of securities matters related to municipal financings have made the role of underwriter’s counsel more complex and more important. Many counsel focus their practice on one or two areas such as general obligation government bonds, airport financings, housing financings, or financings for nonprofit educational institutions, health care providers or cultural institutions. While all public financings have certain basic elements in common, the specific rules, structures, risks and documentation varies from one type of financing to another. The underwriter plays a much more significant role in a negotiated financing in which it is hired at the beginning and involved in every element of the financing. In a competitive financing, the financing is structured and the disclosure prepared and, at the time of pricing, underwriters are asked to bid with the lowest bidder winning the role as underwriter. Underwriters often select counsel experienced in the particular type of financing involved. Each type of financing and each financing itself has differences, and the role of underwriter’s counsel varies from financing to financing. In fact, in certain cases bond counsel may also serve as disclosure counsel with no counsel directly representing the underwriter. This chapter focuses on the primary responsibilities of an ...