Ask the Experts: Analyst Calls
As a hospital CFO, I often get calls from analysts saying they own our bonds and want to ask some questions. Should I return their calls?
Answer: It depends on what your bond documents specify and how well prepared you are to avoid selective disclosure, which is a situation in which material non-public information is disclosed to a single investor and not all investors.
Most bond documents do not require hospitals to respond to investor calls or written requests. If you do decide to return the call, explaining a financial statement is acceptable because it generally does not involve non-public “market-moving” information. However, bringing up a pending downgrade or a future defeasance could be used by an analyst to buy or sell bonds at a profit, so those factors should not be discussed.
To avoid selective disclosure, we recommend having an independent registered municipal advisor (IRMA) on the call to help flag topics that could lead to selective disclosure. Another option is for the hospital to hold a conference call open to all investors and post the invitation and call replay on the Electronic Municipal Market Access (EMMA). Either way, the hospital’s in-house counsel should be consulted.
This question was answered by: Pierre Bogacz, managing director and co-founder, HFA Partners, LLC, and a member of HFMA’s Florida Chapter.
|What do you think? Please share your thoughts on this question in the comments section below.|
The information provided through the Forum’s Ask the Expert service does not constitute legal advice, even when the advice is provided by lawyers. You need to obtain your own legal counsel for legal advice, and consider the laws and regulations that govern your state. The content and opinions expressed are those of the Forum experts, and not that of their employers or of HFMA. HFMA does not endorse the material or warrant or guarantee its accuracy. The responses are based only on the specific facts or circumstances provided. Forum experts cannot be held liable for outcomes related to any information provided.