The Role of Bond Attorneys in Municipal Bond Offerings
A bond attorney is a legal professional who plays a crucial role in municipal bond offerings. They ensure the legality and validity of bond issues, representing bondholders' interests and safeguarding the interests of government agencies or banks. This article explores the fundamentals of what bond attorneys do, their career paths, and their role in lobbying for changes in the bond industry.
Basics
A bond attorney is a specialized lawyer responsible for representing the interests of municipal bondholders during bond offerings. Their primary role is to prepare a legal opinion that certifies the bond issue's legality, validity, and binding nature. They also play essential roles in safeguarding the interests of bondholders during bond and note offerings.
Role of a Bond Attorney in Municipal Bonds
To understand the role of a bond attorney, it's crucial to grasp the concept of municipal bonds. Municipal bonds are debt securities issued by state, county, or local governments to finance various projects like infrastructure development or educational initiatives. These bonds are tax-exempt at the federal level and often at the state and local levels, making them attractive investments.
Specialization and Qualifications
Bond attorneys are highly trained legal professionals. They must pass the state bar exam and hold a Juris Doctor degree. Typically, they work for government agencies or banks and specialize in tax and security law.
Assessment of Bond Issues
A significant part of a bond attorney's role involves investigating the intended purpose of the bond issue and ensuring compliance with relevant laws. They assist government agencies or banks in ensuring that bond issues are correctly structured and complete.
Protection of Interests
As municipal bonds are backed by the full faith and credit of the issuer, the protection of bondholders' interests is of paramount importance. Bond attorneys must pay strict attention to detail and have a deep understanding of legal and financial requirements. They also protect the interests of the funding bank when representing financial institutions involved in bond issuance.
Careers as a Bond Attorney
Bond attorneys have various responsibilities, including:
- Structuring Bond Offerings: Assisting state or local governments in developing strategies for structuring their bond offerings.
- Bond Hearings: Attending or presiding over bond hearings.
- Documentation Management: Managing the documentation required for the bond issuance.
- SEC Attestation: Providing legal opinions to the Securities and Exchange Commission (SEC) or other relevant agencies about the validity of bond sales.
Expertise
According to the American College of Bond Counsel, bond lawyers are experts in all aspects of municipal issues, including bonds, notes, revenue certificates, warrants, and other forms of debt issued by or on behalf of various entities in the United States.
Government vs. Bank Roles
When working for a government or municipality, bond attorneys assist in raising funds for specific projects and ensure compliance with all legal requirements. When working for a bank, they represent the funding institution involved in municipal projects and the issuance of bonds.
Salary and Job Growth
The U.S. Bureau of Labor Statistics (BLS) reports that the median salary for all lawyers, including bond attorneys, was $127,990 in 2021. The projected job growth for all lawyers from 2020 to 2030 is estimated at 9%.
Bond Attorneys and Lobbying Efforts
Bond attorney industry groups sometimes engage in lobbying efforts on issues affecting their members. A notable example is the National Association of Bond Lawyers (NABL), which recommended the creation of new categories of tax-exempt and taxable bonds in August 2017 to facilitate financing for infrastructure, utilities, and schools.
During the Trump administration's consideration of substantial investments in national infrastructure projects, NABL seized the opportunity to propose changes in the use of tax-exempt bonds for public works financing.
Conclusion
Bond attorneys play a critical role in ensuring the legality and validity of municipal bond issues, safeguarding the interests of bondholders, and supporting government agencies and banks in the bond issuance process. Their specialized expertise, qualifications, and responsibilities make them essential in the world of municipal finance. Additionally, they contribute to the industry by engaging in lobbying activities to influence policy changes and promote the use of tax-exempt bonds for public projects. As the legal landscape and financial markets evolve, bond attorneys continue to be pivotal figures in municipal finance.