DID YOU SEE THAT ON JULY 30, 2015 A LOCAL NEWSPAPER’S HEADLINE: “AGENCY ADVISER: OK AAF BONDS”
Then the first sentence of the article was that “All Aboard Florida should be approved to sell $ 1.75 billion in tax exempt bonds, a financial advisor told the Florida Development Finance Corp. (FDFC)”
As an interested observer, might you interpret this to mean that the advisor said to FDFC to go ahead and sell the bonds? Or no?
But who is the advisor? What was the purpose of their engagement? Who did they represent? There was no mention of this.
The advisor was Larson Consulting Services, LLC., Orlando, Florida. Larson Consulting is a full service financial advisory and consulting firm. “As an SEC regulated independent financial advisory firm, Larson Consulting offers a full menu of integrated financial advisory, project management support, economic development, consulting, project finance, and investment support services.” (Source: Larson Consulting website.)
In a July 27, 2015 two-page letter from Jeff Larson, President of Larson Consulting to William Spivey, Executive Director of the Florida Development Finance Corporation (FDFC), Mr. Carlson wrote that: “Carlson Consulting was asked as a financial advisor to FDFC to assist with the documentation review related to this $ $2.5 billion project, and on application/adherence of the existing policies to this bond financing. We are not serving as the financial advisor or municipal advisor to All Aboard Florida.”
In his letter, Mr. Larson further wrote that: “The FDFC Policy states that ‘bonds to be issued without an Investment Grade Rating from a qualified bond rating agency must satisfy the following requirements:
1. The sale of the unrated bonds shall be limited to sophisticated investors (Accredited Investors (“A1”) or Qualified Institutional Buyers (“QIB)),
2. Unrated bonds shall be sold in minimum denominations of:
a: $ 100,000, or
b: No less than $ 25,000……(with other qualifiers),; and
3. The ‘unrated’ bonds and offering document for such unrated bonds shall include appropriate disclosure of the restriction described in this policy, all of which shall be determined at the sole discretion of staff and counsel.
The Preliminary Limited Offering Memorandum (“PLUM”) confirms our understanding that this is intended to be sold by the AAF underwriting team as an unrated issue.”
In closing, Mr. Larson wrote: “We recommend the FDFC Board’s consideration of approval for the Bond Resolution.”
So to clarify, if misleading, Larson Consulting did not recommend FDFC approve the issuance of the bonds; but rather, it recommended “consideration of approval.”
Please refer to a related article on All Aboard Florida’s “collateral” for PAB bonds.