Believing that Utah is in a "growth mode" and there will be large bonding issues to pay for various construction projects, Zions First National Bank has hired the entire staff of Smith Capital Markets Inc. and formed a new department in the bank.
Ted E. Davis, vice chairman and chief executive officer of Zions, and Nicholas G. Smith, who formerly was chairman of Smith Capital Markets and now becomes senior vice president of the new department, announced the hiring.It means seven of Smith's professional staff and three secretaries have joined Zions' public financial specialists to form the $2.4 billion regional bank's new department.
Smith said that since 1981 his company has handled more than $14 billion in municipal bonds. Davis said the bank has had a profitable business in the bonding area, but not of Smith's magnitude.
A veteran of 35 years in the school, city, county, state, water district and other types of municipal bonding business, Smith also has worked for Edward L. Burton and Co., Burrows Smith and Co. and in 1981 started with Prudential-Bache Securities. Smith started Smith Capital Markets Inc. when Prudential-Bache closed its local public financing office.
Besides Smith, the other Smith Capital Markets employees joining Zions are Larry R. Denham, James R. Matsumori, D. Kent Michie, Eric J. Pehrson, Michael J. Todd and Preston F. Kirk. They will join Zions employees Ed Felsing, Rich Burtenshaw and Lee Davis.
Davis and Smith said the hiring will allow the bank to expand its municipal bond trading department, which will underwrite tax exempt bonds in the Intermountain West and will continue to serve all the financial needs of the state and political subdivisions in the region.
The new department will have offices in the Kennecott Building in Salt Lake City, and plans call for the department to open offices in Las Vegas and Phoenix where Zions has banking operations and where Burrows Smith and Co. operated in the past.
Michie, who becomes a bank vice president, said Utah is considered a growth state and there are several projects that could result in large bond issues in the next few years. They include a light-rail system in Salt Lake County, structures for the Olympic Games if Salt Lake City receives a bid, the Salt Palace expansion and $900 million worth of state buildings in the next 10 years.
Also, the Legislature is considering a $50 million bond issue and there are always sewer and water projects on a small scale in several parts of the state for which bonding will be the source of revenue.
In recent years, the largest project on which Smith worked was the Intermountain Power Project for the Intermountain Power Agency. The projects range in size downward for such government entities as the state, Salt Lake County Service Area No. 2, Brigham City, Provo, Davis County School District, Utah Housing Finance Agency, Intermountain Health Care, Salt Lake City, State Board of Regents and the Kearns Improvement District.
Michie said public financing experts serve as advisors to the entity issuing the bonds and help them prepare a statement that is distributed to potential bond purchasers. Sometimes the entity holds a sealed bid and sometimes the interest rates are negotiated with the money going for airports, sewer systems, water systems, jails and public buildings.