2.3.3.3. Continuing Disclosure Agreement
Underwriters are obligated by SEC Rule 15c2-12 to receive a continuing disclosure agreement from the issuer prior to making a bid or accepting a sale. This is an agreement to provide continuing disclosure of information relevant to the market value of the bonds throughout their life. The agreement is signed by the issuer and any other entity that is committed contractually to support payment of the bond obligation.
In the continuing disclosure agreement, the issuer or obligated person commits to provide financial and operating information annually on a specified date and audited annual financial statements to the MSRB. Timely notice is also promised in the event of:
• Principal and interest payment delinquencies
• Defaults
• Unscheduled draws on debt service reserves reflecting financial difficulties
• Unscheduled draws on credit enhancements reflecting financial difficulties
• Substitution of credit or liquidity providers, or their failure to perform
• Adverse tax opinions affecting the tax-exempt status of the bonds
• Modifications to bondholders’ rights
• Bond calls and tender offers
• Defeasances
• Release, substitution or sale of property securing repayment of the securities
• Rating changes
• Bankruptcy, insolvency or receivership
• Merger, acquisition or sale of all issuer assets
• Appointment of successor trustee
• Financial obligation incurrence or agreement of the obligated person, if material
• Default, event of acceleration, termination event, modification of terms or other similar events under the terms of a financial oblig