Legal Documents of Dandridge

The town administrator and finance director may consult with a professional regarding the method of sale of debt. Subject to approval by board of mayor and aldermen, the town administrator and finance director will determine the method of issuance of debt on a case-by-case basis consistent with the options provided by prevailing state law.

1. Competitive sale. In a competitive sale, the town's debt will be offered in a public sale to any and all eligible bidders. Unless bids are rejected, the debt shall be awarded to the bidder providing the lowest true interest cost as long as the bid adheres to the requirements set forth in the official notice of sale.

   In a competitive sale, a financial advisor shall not be permitted to bid on an issue for which they are, or have been providing, advisory services for the issuance, unless otherwise authorized by applicable law and regulation.

2. Negotiated sale. The town recognizes that some securities are best sold through a negotiated sale with an underwriter or group of underwriters. The town shall assess the following circumstances in determining whether a negotiated sale is the best method of sale:
   
   
   1. State requirements on negotiated sales;
   2. Debt structure which may require a strong pre-marketing effort such as those associated with a complex transaction generally referred to as a "story" bond;
   3. Size or structure of the issue which may limit the number of potential bidders;
   4. Market conditions including volatility wherein the town would be better served by the flexibility afforded by careful timing and marketing such as is the case for debt issued to refinance or refund existing debt;
   5. Whether the debt is to be issued as variable rate obligations or perhaps as zero coupon debt;
   6. Whether an idea or financing structure is a proprietary product of a single firm;
   7. In a publicly offered or privately placed, negotiated sale, a financial advisor, if any, shall not be permitted to privately place or underwrite an issue for which they are, or have been providing, advisory services for the issuance; and
   8. If there is an underwriter, the town shall require the underwriter to clearly identify itself in writing (e.g., in a response for request for proposals or in promotional materials provided to an issuer) as an underwriter and not as a financial advisor from the earliest stages of its relationship with the town with respect to that issue. The underwriter must clarify its primary role as a purchaser of securities in an arm's length commercial transaction and that it has financial and other interests that differ from those of the town. The underwriter in a publicly offered, negotiated sale shall be required to provide pricing information both as to interest rates and to takedown per maturity to the town in advance of the pricing of the debt.
3. Private placement. From time to time, the town may elect to privately place its debt. Such placement shall only be considered if this method is demonstrated to be advantageous to the town. (Ord. #11/12-08, Nov. 2011)