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utsa' Dona-marker reuear causes scramoie - i,nariutu; nusrness eournar: rage r or ~ Charlotte Business,journal -Tune 30, 2008 htto• / /eha rlotte.biziou rnals.com /charlotte/ stories/ 2008 /O6I30 / newscaium n 5.htm1 Bt~s~R'~~sJO~A~ Friday, June 27, 2008 ~ Modified: Thursday, June 26, 2008 UBS' bond-market retreat causes scramble Charlotte Business Journal - by Adam Linker Triangle Business Journal Large public agencies in North Carolina -including universities, hospitals and towns -are scrambling to find new banks to market their bonds after Switzerland-based UBS_AG announced it is closing its municipal securities division. As long as other large players stay in the business, public fmance watchers say the cost of issuing and remarketing bonds should not spike. And it could also mean more municipal clients for N.C. companies, including Bank of America. Corp. and Wachoyia_Corp. But the move by UBS is also an administrative headache for many. The North Carolina_Housing,Finance_Agency, aself-supporting public agency that helps develop low-income housing in the state, used UBS to sell and remarket $40o million in bonds issued in January. Connie Helmlinger, a spokeswoman for the agency, says because the sale is not complete, BofA will take over for UBS. The organization has sent out a request for proposals to get a new bank to remarket the bonds, Helmlinger says. "We were highly satisfied with UBS," she says, "so we're sad they're leaving the market." Tony Blalock, president of the Carolinas Municipal_Advisory_Conncil, agroup that rates local bond issues in the Carolinas, says, "We were surprised UBS decided to get out of the business." Blalock says he isn't sure how many N.C. cities and counties used UBS, but it is probably a large number because UBS was the third-largest bank in the municipal business last year. There are other big players in the market, Blalock says, so bond issuers have options. N.C. State University will use Wachovia to remarket a $44.~ million 2003 bond issue, and UNC Chapel Hill will switch to BofAfor its $5o.i million 2ooi issue, says Rob Nelson, vice president for fmance for the UNC System. UBS had been responsible for reselling those bonds, he says. Nelson says BofA and Wachovia both have experience selling to institutional and retail clients. N.C. State Treasurer Kathryn Hart says that with variable-rate debt, bond holders are given the hun://charlotte.biziournals.wm/charlotte/stories/2008/0 /30/newscolumn5.htm1?t=printable 7/7/2008