- Represented the company sponsor/issuer in the structuring, issuance and sale of senior secured nuclear asset-recovery bonds by Duke Energy Florida Project Finance, LLC (a special purpose entity, wholly owned by Duke Energy Florida, LLC), issued pursuant to a Florida securitization statute.
- Represented the structuring advisor in the structuring of, and the underwriters in the issuance and sale of, senior secured securitization bonds by Consumers 2014 Securitization Funding LLC (a special purpose entity, wholly owned by Consumers Energy Company), issued pursuant to a Michigan securitization statute.
- Represented the underwriters in the structuring, issuance and sale of senior secured consumer rate relief bonds by Appalachian Consumer Rate Relief Funding LLC (a special purpose entity, wholly owned by Appalachian Power Company), issued pursuant to a West Virginia securitization statute.
- Represented the structuring advisor in the structuring of, and the underwriters in the issuance and sale of, senior secured phase-in recovery bonds by Ohio Phase-In-Recovery Funding LLC (a special purpose entity, wholly owned by Ohio Power Company), issued pursuant to an Ohio securitization statute.
- Advised the joint book-running managers in the structuring, issuance and sale of senior secured transition bonds by AEP Texas Central Transition Funding III LLC (a special purpose entity, wholly owned by AEP Texas Central Company), issued pursuant to a Texas securitization statute.
- Represented the underwriters in the structuring, issuance and sale of billions of dollars of senior secured system restoration bonds, stranded cost bonds and transition bonds in multiple transactions by various special purpose entities, each wholly owned subsidiaries of Centerpoint Energy Houston Electric, LLC. The securitization bonds were issued pursuant to several Texas securitization statutes.
- Represented the underwriters in the structuring, issuance and sale of senior secured investment recovery bonds by Entergy Louisiana Investment Recovery Funding I, L.L.C. (a special purpose entity, wholly owned by Entergy Louisiana, LLC), issued pursuant to a Louisiana securitization statute.
- Represented the structuring advisors in the structuring of, and the underwriters in the issuance and sale of, billions of dollars of storm cost system restoration bonds in multiple conduit transactions for Louisiana Utilities Restoration Corporation. The conduit offerings were conducted pursuant to a Louisiana securitization statute. The net proceeds were used to make non-shareholder capital contributions to Entergy Louisiana, LLC and Entergy Gulf States Louisiana, LLC (utility subsidiaries of Entergy Corporation). The structure used to issue over $1.6 billion of storm cost system restoration bonds was recognized in 2008 by International Financing Review as “America’s Securitization Transaction of the Year.”
Public Utility Securitization
Over the last two decades, dedicated utility rate reduction bonds have helped utilities recover several categories of costs in a manner that minimizes the rate impact for utility customers and reduces stress on the utility’s ongoing rate structure with off-credit financing. Hunton Andrews Kurth LLP has been instrumental in developing this asset class and played key roles in a majority of recent dedicated utility rate securitizations.
Our lawyers have been involved in several types of utility securitization bond transactions, among them transition to competitive market costs; storm recovery costs; environmental costs; investment recovery costs and; rate stabilization costs. These transactions have included Rule 144A offerings, registered public offerings and special state conduit offerings exempt from registration under Section 3(a)(2) of the Securities Act.
In addition to our transactional work, we regularly advise utilities, structuring advisors, financial advisors and underwriters on Regulation AB and issues pertaining to the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). We responded directly to the SEC regarding proposed rules relating to the risk retention requirements of the Dodd-Frank Act (the “skin in the game” rules). Consistent with comments we filed, the recently re-proposed rules exempt most public utility securitizations from the “skin in the game” rules.