seasongood script - Seasongood Mayer Seasongood Mayer...

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Seasongood & Mayer, established in 1887, is an investment securities firm that engages in the following areas of municipal finance: 1. Underwriting new issues of municipal bonds 2. Trading-for example, acting as a market maker for the buying and selling of previously issued bonds 3. Investment banking-that is, the process of obtaining money from the capital markets at the lowest possible cost . The major applications of quantitative methods at Seasongood & Mayer are in the investment banking area. One particular application involved the use of PERT/ CPM in the introduction of a $31 million hospital revenue bond issue. Scheduling the Introduction of a Bond Issue Any major building project involves certain common steps: 1. Defining the project 2. Determining the cost of the project 3. Financing the project The investment banker's role in building projects is to develop the method of financing that will result in the owner's receiving the necessary funds in a timely manner. In a hospital building project, the typical method of financing is tax-free hospital revenue bonds. The construction cost for the building project is an important factor in determining the best approach to financing. Normally, the construction cost is based on a bid submitted by a contractor or a construction manager. However, this cost is usually guaranteed only for a specified period of time, such as 60--90 days. The major function of the hospital's investment banker is to arrange the timing of the financing in such a way that the proceeds of the bond issue can be made available within the time limit of the guaranteed-price construction bid. Since most hospitals must have the proceeds of their permanent long- term financing in hand prior to committing to major construction contracts, the investment banker's role is a significant one. To arrange for the financing, the investment banker must coordinate the activities of hospital attorneys, the bond counsel, and so on. The cooperation of all parties and the coordination of project activities are best achieved if everyone recognizes the interdependency of the activities and the necessity of completing individual tasks in a timely manner. Seasongood & Mayer has found PERT/CPM to be useful in scheduling and coordinating such a project. As managing underwriter for a $31,050,000 issue of Hospital Facilities Revenue Bonds for Providence Hospital in Hamilton County, Ohio, Seasongood & Mayer used the PERT/CPM critical path procedure to coordinate and schedule the project financing activities. Descriptions of the activities, times required, and immediate predecessors are given in table 1. Specific schedules showing start and finish times for all activities were used to keep the entire project on track. The use of PERT/CPM were instrumental in helping
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This note was uploaded on 04/04/2010 for the course SADA 1111 taught by Professor Dada during the Spring '10 term at Academy of Art University.

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seasongood script - Seasongood Mayer Seasongood Mayer...

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