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Trustee InformationThe Next 30 Years – How to Check Up on Your Trustee?
Presented by:
John DelerayWells Fargo Corporate Trust & Escrow Services
213.614.3351
Presentation for:
CMTA Pre-Conference2005
How to Check Up on Your Trustee
• Flow of Interest Earnings
• Calculation of Interest to Bondholders
• Redemption of Bonds
• The Mighty GIC
• Cash Flows
• Project Fund Distributions
• Rebate
Trustee Watch list:
How to Check Up on Your Trustee
• From each fund to _____ fund
• Reserve, Project, Revenue (or Lease
Payment or Bond Fund), etc.
• Project not fully or over-funded
• Reserve requirement not fully met
• Excess funds not being given properly
as a credit
Flow of Interest Earnings:
Possible Repercussions!
How to Check Up on Your Trustee
• Variable Rate Debt
• Remarketing Agent sends rates to
trustee who inputs into excel spreadsheet
• Incorrect calculation of interest
• Unhappy Bondholders
Calculation of Interest to Bondholders:
Possible Repercussions!
How to Check Up on Your Trustee
• Interest being calculated correctly?
• GIC provider in balance with trustee?
• Incorrect balance in trust
• All possible earnings not received
• Most important in project funds
The Mighty GIC (Guaranteed Investment Contract):
Possible Repercussions:
How to Check Up on Your Trustee
• Revenue Bond Debt (Marks Roos Debt, in particular)
• From the Revenue Funds, where does my revenue go?
• Bonds not redeemed correctly
• Project fund not fully funded
• Proper credits not given
Cash Flows:
Possible Repercussions!
How to Check Up on Your Trustee
• Requisitions in numerical sequence
• Amount paid correctly
• Angry payees
• Payees double paid
Project Fund Distributions:
Possible Repercussions!
How to Check Up on Your Trustee
• How often are calculations due (annually or every
5 years)?
• Who’s going to calculate Arbitrage?
• Ask the IRS!!!
(or your Arbitrage/Rebate
Provider)
• Is Rebate Fund properly funded?
Rebate – the Issuer’s Responsibility:
Possible Repercussions!
How to Check Up on Your Trustee
• Know and check the movement of Interest Earnings
• Verify trustee interest rate spreadsheets
(for Variable Rate Debt)
• Understand how and when bonds are to be redeemed
• Check GIC balance and ask trustee
for verification of interest
• Know and check revenue cash flows
• Check Project Fund requisitions
• Understand your Rebate requirements
(what role is your Trustee playing?)
What’s an Issuer to Do?!
We’re dog-gone happy to help you!
John Deleray – VPBusiness Development
213.614.3351 – tel213.614.3355 – fax
Stuart Weiss – VPBusiness Development
213.614.3356 – tel213.614.3355 – fax
