February 10, 2009
One Year After the Big Freeze, Options Exist for More than $130 Billion Still Frozen in Auction Rate Securities (“ARS”) Saber Partners, LLC to Expand Independent Expert Opinion and Advisory Services for Fair, Proactive Solutions
NEW YORK, Feb 10, 2009 (BUSINESS WIRE) — This week marks the one year anniversary when over $300 billion “auctions” failed for investors and issuers. Despite a year of frenetic activity, investigations and announcements, comprehensive solutions to the crisis have been difficult to find. Investors are still stuck holding an estimated $135-200 billion in securities for closed-end bond funds, student loan companies, state and local governments and not for profit corporations. Issuers believe they have few options. Brokers are in conflicted position. Litigation is increasing.
Saber Partners, LLC, a leading Wall Street financial advisory firm, offers a wide array of independent advisory and expert opinion services concerning the capital markets – with an expanded emphasis on auction rate securities. Auction rate securities are long-term bonds or preferred stock whose interest rate or dividend yield is required to be reset periodically through an investor auction process.
The settlements and “agreements in principle” with brokers and state regulators and the SEC have not fully resolved the matter and created unintended consequences. Outstanding auction rate deals are still conducted exactly the way they were before the massive failures and are expected to continue for an extended period of time. Investor confidence and liquidity issues are not being addressed.
Saber Partners will offer issuers, investors, brokers and litigation counsel an independent perspective on resolving each case including explaining the causes and consequences of the crisis, mitigating the damage and developing comprehensive short-term and long-term solutions including transparency, liquidity, restructurings and refinancings that are fair to participants. Saber has focused on solutions from the private sector to avoid litigation and does not rely on government bail-outs.
Saber Partners’ auction rate financial advisory, opinion and expert witness practice is led by Joseph S. Fichera, Senior Managing Director and CEO who first advised clients on problems with auction rate securities more than 20 years ago. He was also recognized by “Institutional Investor Magazine” for an innovative and equitable resolution of a previous auction security failure crisis. Mr. Fichera has been an investment banker and strategic financial advisor since 1982.
Other Saber Partners expert opinion and advisory services personnel include former financial executives from some of the largest U.S. corporations, regulatory bodies and buy-side investment management companies.
Representative related matters by Mr. Fichera include:
- Advisor to the U.S. Securities and Exchange Commission on its investigation of ARS 2004-2006;
- Expert on the structuring of the multiple types of auction rate securities, including auction rate preferred for closed-end funds, auction rate municipal and corporate debt and other differences between and among auction rate securities;
- Familiarity, as a securities principal, with FINRA suitability requirements, public offering and registration process and standards, including securitizations and structured securities;
- Author of several well-received articles on auction rate securities and their alternatives;
- Frequent commenter on the auction rate securities market as an authoritative source by such new outlets as The New York Times, Bloomberg News, The Wall Street Journal, and The Bond Buyer. Regularly appears on financial broadcasts including NPR’s Marketplace and Bloomberg Television; presenter on the auction rate securities crisis at The Bond Buyer industry conferences;
- Direct experience with both the functioning of successful auctions and the restoration of investor confidence and liquidity to failed auction rate securities leading to subsequent successful auctions for municipal and closed-end fund issuers.
Saber Partners recently served as financial advisor to the 3rd largest municipal bond issuer in the country on the immediate aftermath of the auction crisis. Mr. Fichera is a Visiting Lecturer of Public and International Affairs at Princeton University, where he teaches a course on public finance. He holds an undergraduate degree from Princeton and an MBA from Yale. Mr. Fichera also has securities licenses of Series 24, Series 7 and Series 63. More details on Mr. Fichera and other Saber members’ backgrounds can be found at: https://saberpartners.com/management/
Selected List of Recent Saber Citations in National Publications, Articles and Awards
RECENT CITATIONS ON AUCTION CRISIS
The Boston Globe, “$135b still frozen by an early ’08 debacle, Later
events eclipsed the auction-rate mess”
The Bond Buyer, “Can ARS be Fixed?
By Andrew Ackerman, July 10, 2008
Bloomberg News, “Wall Street’s Customer’s Man Fichera Unmasked
Auction-Rate Market in 1980’s”
By Michael Quint, May 30, 2008
The New York Times, “How to Clear a Road to Redemption”
By Gretchen Morgenson, May 4, 2008
The New York Times, “It’s a Long, Cold, Cashless Siege”
By Gretchen Morgenson, April 13, 2008
Bloomberg News, “Muni Regulator Plans Improved Auction-Rate Disclosure” (Update 2)
By Darrell Preston March 17, 2008
Muni Regulator Plans Improved Auction-Rate Disclosure (Update2)
Bloomberg News, “Muni Regulators Seek Disclosure on Auction-Rate
Bonds” (Update 5)
By Michael Quint, February 15, 2008
Muni Regulators Seek Disclosure on Auction-Rate Bonds
NATIONAL CONFERENCES DISCUSSING AUCTION SECURITIES
The Bond Buyer: “Municipal Credit Crunch Conference San Francisco” April 3, New York and March 26, 2008, “Managing the Damage”
The Bond Buyer, “National Municipal Derivatives Conference” May 20, 2008 New York, “Making Markets Work”
ARTICLES ON AUCTION SECURITIES AND ALTERNATIVES
“Making Matters Worse: Dangers of Auction Rate Securities”
Making Matters Worse: Auction Rate Securities
“The Advantages of Remarketed Preferred Stock” as an Alternative to
Auction Preferred Stock for Close-End Funds
RECOGNITIONS FOR RESOLVING FAILED AUCTIONS
Institutional Investor Magazine “Deal of the Year” award for repairing failed auction rate securities for municipal and closed-end funds.
1991 Deal of the Year Award – Repairing Failed Auction Rate Securities
Saber Partners, LLC, is a New York-based financial advisory firm. It provides independent analysis and strategic advice to private and public sector entities including state and federal regulators. The firm advises on tactical and often innovative financing solutions across a spectrum of financial products including corporate debt and equity, securitized debt and municipal finance. Clients have included ExxonMobil Corporation, the U.S. Securities and Exchange Commission, the Governor of California and Public Service Commissions of Florida, West Virginia and Wisconsin among others.