This Issuance Policy is intended as a guide for the California Public Finance Authority (“CalPFA”) and for applicants. While CalPFA reserves the right, in its discretion, to approve exceptions, applicants should not expect any exceptions.
General Requirements – All Financings
- Approval by the city, county or local agency hosting the proposed project as required under the Internal Revenue Code.
- Standard indemnification with respect to the financing and the project provided by the applicant to CalPFA in the appropriate financing documents.
- Standard indemnification with respect to the issuance and sale of Bonds provided by the underwriter to CalPFA in the purchase contract.
- CalPFA’s Issuer Counsel shall conduct a review of the financing documents for consistency with CalPFA’s policies and form documents.
- CalPFA’s program administrator shall conduct a review of the financing.
- If offering material or a disclosure document is required, it shall contain language that CalPFA takes no responsibility for the disclosures contained therein (except for information under the sections titled "THE AUTHORITY" and "LITIGATION" to the extent such information pertains to CalPFA);
- If offering material or a disclosure document is required, the applicant shall have its counsel deliver a 10b-5 opinion covering such document at closing. The contents of such opinion shall be to the satisfaction of CalPFA and its counsel.
Requirements for Financings Rated "BBB-" or Better
Financings rated "BBB-" through "AAA" by any 1 of the following rating agencies (S&P, Moody's, and Fitch) will be subject to the requirements below.
- Bonds may be issued and sold through a public offering, private placement or limited public offering with appropriate disclosure or offering materials.
- Bonds may be issued in $5,000 or such other minimum denominations at the discretion of the applicant and approved by CalPFA.
Requirements for Financings Rated Below "BBB-" or Unrated
- Bonds may be sold to (a) purchasers that are "qualified institutional buyers" as generally defined under Rule 144A of the Securities Act of 1933 who shall be required to furnish the Authority with a written representation, or satisfactory evidence, as to their status as qualified institutional buyers, and/or (b) purchasers that are “accredited investors” as generally defined under Regulation D of the Securities Act of 1933 and all initial accredited investors that are not qualified institutional buyers shall execute a sophisticated investor letter in form acceptable to CalPFA.
- The offering material/disclosure document, if any, shall prominently indicate on the cover that Bonds can only be sold to qualified institutional buyers and/or accredited investors.
- The face of each Bond shall contain a legend stating to the effect that such Bond can only be sold or transferred to qualified institutional buyers and/or accredited investors.
- The bond documents shall contain provisions that restrict the ability to transfer the Bonds to only qualified institutional buyers and/or accredited investors.
- Bonds may be issued and sold through a private placement or limited public offering with appropriate disclosure or offering materials, unless waived in the case of a private placement to a financial institution buyer that has performed underwriting/due diligence with respect to the applicant and the bonds.
- Bonds may be issued in $5,000 or such other minimum denominations at the discretion of the applicant and approved by the Authority; however, “accredited investors” shall be subject to a $25,000 minimum purchase requirement.
- Bonds shall be delivered in book-entry form, if delivered to a broker or dealer subject to MSRB Rule G-15, and otherwise shall be physically delivered.