Most issuers of publicly offered municipal debt are now aware that the U.S. Securities and Exchange Commission (“SEC”) amended Rule 15c2-12 (effective February 27, 2019) to expand the list of reportable events (increasing from 14 to 16). The two new events include:
15. Incurrence of a financial obligation of the obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the obligated person, any of which affect security holders, if material; and
16. Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of a financial obligation of the obligated person, any of which reflect financial difficulties.
Issuers may not be aware that certain equipment leases, state and federal funding programs, and other direct placements are classified by the SEC as “financial obligations” under event #15.
Given that issuers are required to post event notices to the Electronic Municipal Market Access (“EMMA”) website within 10 business days after the event occurs, issuers of equipment leases, state and federal funding programs, and other direct placements should immediately contact their continuing disclosure consultant and/or disclosure counsel to help determine if an event notice is required.
NHA Advisors provides comprehensive continuing disclosure compliance services to public agencies throughout California and Nevada. If you have questions regarding your agency’s continuing disclosure obligations, please email NHA Advisors at Disclosure@NHAadvisors.com for assistance.