Financial advisor who worked with City of Natchez arrested in Delta case
NATCHEZ — v
Porter Bingham, 57, was arrested March 23 on the indictments related to his role as a financial advisor for the City of Rolling Fork in the Mississippi Delta, in connection to the issuance of municipal bonds in 2015.
The case is being investigated by the Federal Bureau of Investigation and is being prosecuted by Assistant United States Attorney Dave Fulcher.
Bingham had worked with the City of Natchez on a 2006 interest-rate swap to refinance a 1999 Natchez Convention Center bond issue.
At that time, Bingham was CEO of Malachi Financial Products, a financial services company that worked with and proposed bond refinancing and other financial transactions in cities including Jackson, Canton and Natchez.
The original interest-rate swap transaction for the Natchez Convention Center was executed in 2006 with Malachi Financial Products and refinanced the 1999 bond the city issued to build the Natchez Convention Center.
The Bank of New York was the lead agency in the swap, and New York-based Rice Financial Products was also involved in the swap. The city’s outside legal counsel was Tony Gaylor of the Jackson-based Chambers & Gaylor firm.
After paying all transaction and legal fees to all parties involved, the city received approximately $170,000 of the $400,000 generated from the swap in 2006 to pay toward debt service.
City officials originally thought, The Democrat reported, when Malachi presented the city with a ceremonial check for $400,000 in 2006, they would receive all of the $400,000.
Jake Middleton, an alderman at the time, said he was disappointed with how the transaction was handled.
A bond swap is a complicated financial transaction in which one entity, in this case the city, agrees contractually to “swap” a payment usually based on a fixed-rate interest index, with another entity whose payment is usually based on a variable rate.
In this case, the city agreed to pay the interest equivalent to the Bond Market Associations index. The bank agrees to pay a percentage of another interest index, the London InterBank Offered Rate, or LIBOR.
City officials later said they believe aldermen were confused about the transaction when they entered into it, and the decision was further complicated by the market crash of 2008.
Last year, Natchez aldermen refinanced up to $7.45 million of the remaining debt on the Natchez Convention Center to refinance the 2006 bonds on the convention center. The city used a different firm to assist in the 2018 refinance.
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