MCM is a specialty investment banking firm. The firm specializes in the origination
of municipal bonds in just four sectors of the municipal marketplace. Fiber To The
Home is one of them. Financing FTTH systems requires an investment banking firm that
understands the FTTH industry and understands what investors will be looking for when
considering investments in this sector. Experience in the sale of non-rated as well
as rated bonds is also critical. Most FTTH systems will be financed with non-rated
bonds as they are "start-up" operations. In addition, most FTTH systems are set
up without the municipality's financial support, and as such will not be eligible
to carry the bond rating of the municipality issuing the bonds. Since its founding in
1989, over 80% of the bonds underwritten by MCM have been non-rated. The chart below
illustrates our non-rated business as compared to our rated bond business in the last three years.
