Municipal Financial Products


Our Municipal Financial Products team (MFP) works with public funds issuers throughout the country to implement investment strategies containing three common objectives: safety, liquidity and yield. To achieve these objectives, our Municipal Financial Products team works with local governments and 501(c)3 issuers to help make sure their investable funds are allocated across an appropriate blend of eligible investments, i.e., Municipal Financial Products as defined under SEC regulation. Generally, local governments and other tax-exempt issuers focus their investing attention on the following group of funds:

  • Project Funds
  • Escrow Funds
  • Debt Service Funds
  • Debt Service Reserve Funds
  • Capitalized Interest Funds
  • Operating Funds

Our MFP desk has wide‐ranging experience assisting municipal clients with execution, compliance, and surveillance of municipal financial products, including swaps, options, and other municipal derivatives. Our firm focuses on creating a seamless and transparent process that helps our clients become knowledgeable about municipal financial products and achieve appropriate economic results. Typically, public funds issuers use municipal derivatives for one or more of the following reasons:

  • Lower the cost of borrowing/cost of capital
  • Produce additional cash flow
  • Hedge cash flow risk and market risk

Our attention to detail and business procedures is designed to provide a thorough understanding of a client’s current capital structure and future funding needs (i.e. debt issuance). As your fiduciary for municipal entities, our firm stands ready to help you evaluate whether any contemplated transaction meets stated objectives while simultaneously minimizing risk exposure associated with the use of any municipal derivative product.


In addition to evaluating ways to augment revenues, our MFP desk can assist in managing energy-related commodities. Masterson routinely advises clients regarding physical commodity hedging programs for energy-related commodities, including diesel fuel, gasoline, natural gas, and electricity. We advise on the development of suitable risk management programs/policies which take into consideration the hedge effectiveness of actual commodity purchase prices versus various commodity benchmark indexes. Related thereto, we perform staff and board education, as requested. Most importantly, Masterson can independently evaluate suitability and fair pricing, thereby satisfying Federal Regulations (Dodd-Frank & Commodity Exchange Act) requiring a governmental entity to certify that it has exercised independent judgment in evaluating hedging transactions.


As a registered municipal advisor (MA), our team of public finance professionals is dedicated to fulfilling all of its fiduciary responsibilities to municipal entities. With this in mind, we hold one simple ideal very dear, “just do the right thing.” This core belief forms the foundation of our firm’s decision‐making process, and it is how we measure success. Our clients engage us because of our dedication to building stronger communities and dedication to assisting public funds issuers with their balance sheet management needs. We have extensive experience in public finance, and we offer a wide range of advisory services relating to municipal financial products, or an issuance of municipal securities. As an independent representative of issuers nation‐wide, we are dedicated to achieving fair and competitive pricing across the full range of municipal financial products.


Maintaining an integrated pricing desk that is solely focused on municipal financial products benefits our clients in at least three specific areas: accuracy, market intelligence, and synergy. An integrated pricing desk provides “free-flowing” information that increases accuracy and helps assure our clients reliable, defendable, and cost-effective pricing. Our MFP desk interacts with multiple trading desks (funding, municipal trading and underwriting, and municipal derivatives) at all major Wall Street firms and most regional banks, which equips our desk with the tools and information needed to get the best execution for our clients.


Following successful execution, our MFP team helps ensure a speedy and efficient settlement process by keeping a consistent line of communication open between all parties to the agreement. Our team can do this by coordinating the document tracking progress, keeping all parties accountable to deadlines, and tracking wires that occur on the settlement date. It is our belief that being the point of contact during the settlement process provides the best service to our clients and assures a successful settlement.


Ensuring compliance with all major regulatory bodies is of the utmost importance. Our MFP desk is well-versed in all the applicable laws for each one of our product offerings and continues to stay up-to-date on any changes in regulation. Upon executing and settling any product offering, our team delivers a transaction transcript that includes all the documents required by regulators and summarizes the transaction from start to finish.


The Masterson Advisors team provides assistance with GASB/FASB requirements related to derivative valuation and reporting. Our professionals are highly regarded in the field of financial accounting for derivatives, and we currently provide accounting related services to numerous governmental and not-for-profit clients. With more than 35 years of collective experience in structured finance transactions, our team has advised our clients on numerous types of municipal financial products, and we understand how the nuances of a transaction can impact GASB/FASB analysis and reporting. Masterson Advisors’ Municipal Financial Products group has developed and implemented specific tools for GASB 53/64, FASB Topic 815, and 820 which provide accurate, independent results while minimizing the time for analysis and delivery. 

Masterson Advisors LLC

3 Greenway Plaza, Suite 1100
Houston, Texas 77046

Houston Office
3 Greenway Plaza, Suite 1100
Houston, Texas 77046


Masterson Advisors LLC

3102 Maple Ave. Suite 225
Dallas, TX 75201

Dallas Office
3102 Maple Ave. Suite 225
Dallas, Texas 75201


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