Every bond-funded city project has a lender's copy, and it's on EMMA.
Official statements and continuing disclosures on EMMA are written for bond investors. Here's the read order we use and what each section can support.
A ribbon-cutting and a two-page PDF
Picture a mayor at a podium in front of a half-finished transit station, calling the project on time and on budget. The clip runs on the local news that night.
Now picture the same week on EMMA. The authority that issued the project's bonds posts a short notice under its continuing disclosure agreement: an unscheduled draw on a debt service reserve reflecting financial difficulties. Two pages. Bond analysts read it. Few people covering the city do.
That scene is a composite and describes no real city. The filing type is real, though, and it exists because of a federal rule. The bond documents for a local project are public and free, and they're written for a reader the press office isn't addressing.
The lender's copy
A bond-funded city project gets written up twice. The voter's copy is the press release, the council presentation and the ribbon-cutting remarks. The lender's copy is the official statement published when the bonds are sold, plus the continuing disclosures the issuer files while those bonds are outstanding.
We call it the lender's copy because of who it's written for. Investors lend the city money, and federal securities antifraud rules apply to what they're told. So these documents tend to say what a press office leaves out: which revenue repays the debt, what could go wrong with it, and whether the issuer has missed past filings.
Council agendas and records requests stay useful. The lender's copy adds a document written for a reader with money at stake.
What the disclosure rule requires
The obligation traces to SEC Rule 15c2-12. The rule works through the underwriters: before selling a covered new municipal offering, they must reasonably determine that the issuer has agreed in writing to keep disclosing after the sale. That written undertaking is what fills EMMA, the free public site run by the Municipal Securities Rulemaking Board (MSRB). EMMA has been the central repository for continuing disclosures since July 2009, and it also posts official statements.
Two kinds of filings follow. Annual financial information, plus audited financial statements when available, arrives on a schedule the issuer sets in its undertaking. Event notices work differently. The rule lists 16 event types, and the undertaking commits the issuer to post a notice "in a timely manner not in excess of ten business days" after one occurs. The list includes principal and interest delinquencies, unscheduled draws on debt service reserves reflecting financial difficulties, rating changes and bankruptcy.
Two events were added by 2018 amendments: incurring a material financial obligation, such as a direct bank loan, and a default or similar event under one reflecting financial difficulties. They apply to undertakings entered into on or after February 27, 2019, so older bonds may not carry them. For a newer issuer, that notice may be one of the few public records of a bank loan.
Coverage has limits. The rule applies to offerings of $1 million or more and exempts some others, such as offerings in $100,000 denominations sold to no more than 35 sophisticated investors. The EMMA FAQ also notes the MSRB doesn't review what issuers submit. A missing filing doesn't prove a missing debt, and a posted one is the issuer's statement.
- 16 Listed event types an issuer's undertaking covers (SEC Rule 15c2-12(b)(5)(i)(C))
- 10 business days Maximum time to post a listed-event notice (SEC Rule 15c2-12(b)(5)(i)(C))
- 5 years Look-back an official statement covers for material failures to comply with prior undertakings (SEC Rule 15c2-12(f)(3))
How to read a school district's lender's copy
Take a hypothetical school district that passed a construction bond referendum and keeps saying the new high school is on track. This is the order we'd read in.
Search for the district by name on EMMA. Its issuer page groups official statements and continuing disclosures.
Open the most recent official statement and go to the sources and uses of funds. It shows how much of the borrowing goes to construction and how much to reserves, capitalized interest and costs of issuance. If the referendum promised one number and construction gets a smaller one, you have a question for the district.
Next, the section on security for the bonds. It tells you what repays the debt. A general obligation pledge backed by property taxes is a different promise to residents than debt repaid from one revenue stream.
Then the risk section (titles vary), litigation, and the paragraph on continuing disclosure compliance. The rule requires a final official statement to describe material failures to comply with prior undertakings over the previous five years. A district that has been late on its own filings says so there.
Last, open the continuing disclosures and sort by date. An event notice filed after the official statement is new information. Set the latest annual filing next to the enrollment and tax-base assumptions in the official statement, and note where they differ.
| Where to look | What it tells a local reporter | What it can't support alone |
|---|---|---|
| Official statement: sources and uses of funds | Dollars going to the project versus reserves, capitalized interest and issuance costs | Whether the project is over budget today |
| Official statement: security for the bonds | Which tax or revenue stream repays the debt | Whether taxes will rise for a given household |
| Official statement: risk section (titles vary) | What the issuer and its counsel list as risks to repayment | That any listed risk is likely |
| Official statement: litigation | Pending suits the issuer considers relevant to the bonds | The merits of those suits |
| Official statement: continuing disclosure compliance | Material missed or late filings in the past five years | The reason for a lapse, unless stated |
| EMMA: event notices | Reserve draws, rating changes, new material financial obligations, posted within ten business days | Cause or severity, until you ask the issuer |
| EMMA: annual financial filings | Audited results to compare with the official statement's assumptions | Why results differ from those assumptions |
The lender's copy read order. Section names vary by issuer; the disclosure obligations come from SEC Rule 15c2-12.
Treat a notice as a lead
A reserve draw or a rating change justifies a phone call before it justifies a headline. On insured bonds, a rating notice can reflect the insurer's rating rather than the issuer's own credit. Read whose rating moved, then ask the issuer's finance office what triggered the notice.
Why citing the lender's copy holds up
Citing an official statement by date and section gives readers something they can check. It also tracks a gap regulators care about. In May 2013 the SEC charged the City of Harrisburg, Pennsylvania with securities fraud over public statements, including a budget and a State of the City address, made while its continuing disclosures had lapsed. The SEC described it as the first time it had charged a municipality for misleading statements made outside its securities disclosure documents. The city settled without admitting or denying the findings.
The translation is the reporting work. An event notice may say "unscheduled draw on debt service reserves." Your readers need to know whether that means revenue came in short, and the only defensible way to say so is after the issuer or a later filing confirms it.
A standing file for one issuer
Pick the one or two local issuers your readers care about most: the school district, the transit authority, the water utility. For each, save the latest official statement, the date the annual filing is due under its undertaking, and every event notice since the last offering. Check the issuer page on a fixed day each month.
The coverage around those issuers is what tells you when a notice matters. Niche briefings follow a field, check coverage against independent sources and link to them. Reading EMMA stays with you. Our guide to state lobbying disclosures covers another public record for the same local beat.
Frequently asked questions
What is EMMA and is it free?
EMMA (Electronic Municipal Market Access) is the public site run by the Municipal Securities Rulemaking Board for municipal bond disclosures. It's free to search and read at emma.msrb.org.
What's the difference between an official statement and a continuing disclosure?
The official statement is the offering document published when bonds are sold. Continuing disclosures are filed afterward while the bonds are outstanding, and include annual financial information and notices of listed events.
How quickly do issuers have to post event notices?
Under the undertakings required by SEC Rule 15c2-12, within ten business days of a listed event, such as a principal or interest delinquency, a rating change or an unscheduled reserve draw reflecting financial difficulties.
Does every city borrowing show up on EMMA?
No. The rule exempts some offerings, and the bank-loan event notices apply only to undertakings entered into on or after February 27, 2019. A missing filing doesn't prove a missing debt.