Reflecting On The Days of New York Bond Rating Trips

Okay, Tea Party Zealots, here comes one that will make you go berserko.

There was a day when most local governments went to NYC to make their case to the bond rating agencies. The business case presented was how well local governments were managing money, including past and proposed bond issues.

These were usually annual trips. They included the City Manager,  Finance & Budget Director as well as the Mayor. Sometimes the entire City Council or Commissioners Court attended but not usually.

These trips were expensive and often made into junkets, some more extravagant than necessary. My line and your line would probably differ. I have made a one-day round trip to NY and never want to do that again. They were usually two-day trips, maybe three.

I’m pretty sure the Financial Advisors hated them. I recall during a busy issuance season when an FA would put one client on an airplane back to DFW with the same plane bringing another client.

I think the bond rating agencies hated them, too. All three major firms created Texas offices that made the trips unnecessary for the most part. They also wanted more direct contact with the governments.

But my memories of those trips are mostly fond experiences.

Going to NYC to speak to the rating agencies was the only time in my career I felt I was being treated like my corporate counterparts. The agencies had good questions. And to this day, they are the only parties that truly care more about the future of your city than they do about your situation right now. It’s an entire different line of questioning. For instance, they were asking about infrastructure four decades ago.

And I loved to be in the same room with elected officials listening to those questions and responding to those questions when directed to the Mayor or County Judge. If they hadn’t thought about it before the meeting, these elected officials sure as hell walked away realizing there was a constituency they best never forget.

One that is taking $millions out of their pockets to buy your bonds in good faith that they will be repaid as much as two or more decades from now.

There were other things I remember. One I cherish was getting to NYC on a Sunday for meetings the following two days. The entire Dallas County Commissioners Court and a few staffers gathered in one room to watch the Cowboy game. These guys who fought and got downright ugly for the media on a regular basis were enjoying each other’s company for a few hours. And the collegiality spilled over to the bond rating meetings. They were unified and committed to fiscal responsible decisions equal to a blood oath in front of the agencies. It was a beautiful moment.

And yes, Tea Party, it was an unequaled experience to dine at Tavern on the Green and then see a Broadway Show with the Mayor or Councilmember while being driven in a limo rather than a cab. Caught in a snowstorm one time when cabs disappeared, no limo meant being stranded.

I was a corporate CFO with the President and Chair of the Board for a few days before returning to suffer the politics as a bureaucrat. I can feel the exhilaration like it was yesterday.

Yes, it was expensive even though a small part of selling $millions in bonds in light of other fees. If you are a TPZ, you haven’t paid attention to a damn word I’ve written, except for the cost part.

But many of the benefits cannot be replicated today. I truly miss those days and experiences, especially the professional respect that went in all directions. LFM


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