The International Law Firm of Fulbright & Jaworski - Public Finance
March 2010
In the News
Bond-Funded Alternative Energy Project Wins Project of the Year
One of the alternative energy projects of the Southern California Public Power Authority ("SCPPA")—called the Milford Wind Corridor Phase I Project—has been named 2009 Alternative Energy Project of the Year by the Renewable Energy World magazine. Fulbright assisted in the preparation of the Power Purchase Agreement, the Power Sales Agreements and other project agreements relating to the project. Fulbright also acted as Bond Counsel and Disclosure Counsel in the financing of the bonds for this project.
In February 2010, SCPPA issued $237 million of bonds to finance the prepayment of guaranteed generation from a 203.5 MW wind farm located in the State of Utah for a 20-year term. Additional financings are planned as this project expands to up to 1,000 MW. The financing structure is one of the first in the country to use tax-exempt bonds to prepay for electric energy. In addition, SCPPA, upon the satisfaction of certain conditions, may purchase the project in 10 years.
Energy purchased from the project by SCPPA will supply electricity to three of SCPPA's 12 members: the Los Angeles Department of Water and Power, the City of Burbank and the City of Pasadena.
The cross-country Fulbright team included Los Angeles partner Stephen Cole, Los Angeles senior counsel Cecilia Dyba, New York of counsel Robert Ferdon, New York partner David Gillespie and D.C. partner Stephen Watson.
New York City Transitional Finance Authority Selects Fulbright
The New York City Transitional Finance Authority (the "TFA"), which issues bonds to finance projects that would otherwise be financed with City of New York general obligation bonds, has selected Fulbright as bond counsel for its Building Aid Revenue Bond program. The TFA issued $2.27 billion of such bonds in its fiscal year ending June 30, 2009. The Fulbright team includes New York partner Randolph Mayer, Washington, D.C. partner Steve Watson and New York counsel Anna Lee.
Houston Partner Co-Chairs Mayor’s Inaugural Celebration
On January 4, 2010, Houston partner Neil Thomas served as co-chair of Houston’s next mayor Annise Parker's inauguration celebration committee.
Thomas, a partner in Fulbright's Houston office since 1995, acts principally as bond counsel, underwriters' counsel and disclosure counsel for local government and private activity financing. He worked with Ms. Parker during the six years she served as the City Controller.
Thomas and Houston retired partner Richard Huff served on Parker's finance committee. Thomas served alongside David Arpin, the campaign's Finance Chair, as co-chair of the event committee.
Fulbright Provides Legal Opinion to Texas MAC
Fulbright provided a legal opinion to the Municipal Advisory Council of Texas (“Texas MAC”), which operates as the State Information Depository (“SID”) for Texas, on recent amendments to SEC Rule 15c2-12 (“the Rule”). The opinion addresses whether applicable filers must continue to submit certain continuing disclosure reports to the Texas MAC.
Amendments to the Rule eliminate the requirement that issuers and other obligated persons filing with Electronic Municipal Market Access (“EMMA”) also file the same information with SIDs for disclosure undertakings entered into after July 1, 2009, the effective date of the amendments.
However, the SEC also advised at the time that “the final amendments will have no effect on the obligations of issuers and obligated persons under outstanding continuing disclosure agreements entered into prior to the effective date of [the] amendments to the Rule, to submit continuing disclosure documents to the appropriate SID.”
Fulbright concluded that, so long as the SID continues its subscription and automatically receives on a real-time basis all such continuing disclosure documents filed the MSRB through EMMA, then an issuer may satisfy any pre-July 1, 2009 continuing disclosure undertaking (in the MAC-approved form) to make filings with the applicable SID by filing with EMMA (without also separately submitting the filing directly with the SID). The MAC also assured past filers that it intends to notify them promptly in the unlikely event that its subscription lapses.
Click to view Fulbright's Legal Opinion.
Texas MAC maintains an index of filings for Texas issues it has received from EMMA; the index is available on the MacTexas.com website under Disclosure Filings.
Power Plant Owner Issues $1.4B of Bonds in Scrubber Installation Financing Program
Fulbright represented Ohio Valley Electric Corporation (OVEC) in a $1.4 billion financing program for the construction of additional environmental controls at its two coal-fired power plants in Ohio and Indiana.
This financing program consisted of both fixed and variable rate long-term notes issued by OVEC in private placements, as well as long-term variable and medium-term fixed rate tax exempt bonds issued by the Ohio Air Quality Development Authority.
OVEC owns the Kyger Creek coal-fired power plant in Cheshire, Ohio, and (through its subsidiary, Indiana-Kentucky Electric Corporation) the Clifty Creek coal-fired power plant in Madison, Indiana, with generating capacities of 1085MW and 1302MW, respectively. OVEC also owns a 776-mile high-voltage transmission system.
The additional environmental controls consist of flue gas desulpherization units (or "scrubbers") designed to reduce emissions of SO2 by as much as 98%. OVEC is owned by and sells its electricity to a consortium of Midwest electric utilities, including American Electric Power, Buckeye Power, Duke Power, The Dayton Power and Light Co., First Energy, Vectren, Louisville Gas & Electric Co. and Kentucky Utilities Co. The OVEC plants were originally constructed in the mid-1950s to serve a uranium enrichment facility owned by the US government.
Fulbright’s finance team, led by New York corporate partner Mark Tibberts and New York corporate counsel Anna Lee, included New York corporate associates Alyssa Vazquez and Nicole Wright, New York utility regulatory associates Tania Perez and Stephanie DeGiacomo and Austin environmental partner Pat Braddock.
Fulbright Assists Westchester County with General Obligation and Build America Bonds Issue
Fulbright was one of two firms serving as bond counsel in the issuance of $173.1 million in general obligation bonds by Westchester County, N.Y. Fulbright was bond counsel on tax-exempt Series 2010 C-1, with maturities through 2019, and on a second series, Series 2010 C-2, with maturities from 2020 to 2040, for which bidders had the option of bidding tax-exempt rates or taxable Build America Bond ("BAB") rates. The bidders all submitted taxable BAB rates on the Series 2010 C-2.
The County issued the Series 2010 C-1 bonds and the Series 2010 C-2 bonds to finance long-term water and sewer infrastructure projects.Westchester County carries a triple-A rating and usually issues new bonds once a year to finance capital projects.
The issuance was the first under a state pilot program in which only electronic bids were accepted. The three-year electronic bidding pilot program was enacted last year by New York’s state legislature. If it proves successful in Westchester County, the use of electronic bidding may spread throughout the state. This first auction was closed although the pilot program does allow for open auctions.
The Fulbright team is lead by Randolph Mayer, New York partner.
Recent Rankings
In The Bond Buyer 2009 year end summary, Fulbright was once again in the top 10 in the nation in the following categories:
- 6th in the nation and 3rd in Texas as bond counsel in 2009, helping to issue $10.44 billion par amount of bonds in 269 issues
- 9th in the nation as underwriters' counsel in 2009, helping to market $6.89 billion par amount of bonds in 144 issues
- 6th in the nation as disclosure counsel in 2009, helping to offer $3.72 billion par amount of bonds in 70 issues
Spotlight Office: New York
Fulbright's New York office has six full-time public finance attorneys who handle transactions throughout the continental United States as bond counsel, underwriters' counsel, disclosure counsel, counsel to credit enhancers and liquidity providers and counsel to the providers of various other financial products such as swaps. Their areas of specialization include:
- utility financings and contract negotiations, especially for public power, water, waste water and solid waste;
- alternative energy financings and contract negotiations, including wind, geothermal and solar;
- health care financings, particularly general acute care hospitals;
- transportation financings and contract negotiations, including highways, toll roads and mass transit;
- industrial development, urban renewal and state revolving loan fund programs;
- multi-family housing finance programs, including military housing; and
- structured and project financings, as well as leasing transactions and securitizations.
