COVID-19 Event Notices by Public Finance Participants

March 24, 2020

Most issuers, borrowers, or other entities that have benefited from the issuance of publicly offered municipal bonds (known as “obligated persons”) should evaluate whether they should file an “event notice” under the continuing disclosure undertaking entered into in connection with the issuance. These undertakings, among other things, generally require the obligated person to file notice of the occurrence of certain events on the Municipal Securities Rulemaking Board’s Electronic Municipal Market Access (EMMA) website. While very few continuing disclosure undertakings specifically require an event notice for the occurrence of events that might materially disrupt the operations or revenue sources of an obligated person, we have seen several instances where obligated persons have nevertheless decided to voluntarily file a notice explaining the potential impact of COVID-19.

Hospitals, colleges and universities, airports, transportation authorities, and others that may be disproportionately affected by COVID-19 disruptions have been the most frequent recent filers of voluntary event notices on EMMA. There may be other obligated persons, including those that rely on a particular revenue source to provide debt service for their bonds, such as sales taxes, that will be directly affected by the widespread shutdowns of businesses in the wake of the COVID-19 pandemic. These obligated persons may want to evaluate the need to file a voluntary event notice.

Obligated persons that are considering filing a voluntary notice on EMMA to describe the impact of COVID-19 should consult with experienced disclosure counsel to determine the advisability of filing.

In response to the coronavirus (COVID-19) pandemic, Lewis Rice has formed a COVID-19 Task Force which brings together subject matter authorities from various practice areas within the Firm who stand ready to assist our clients as they navigate these challenging and evolving issues. We will continue to monitor the myriad legal and other developments that may impact our public finance clients, and our attorneys are happy to discuss these matters and to assist obligated persons in preparing a voluntary notice filing.

If you have legal questions related to COVID-19, please reach out to one of the authors above or another member of the Task Force.