Hunton & Williams LLP's power and energy capital markets practice - a subgroup of our energy and infrastructure practice - consists of approximately 20 lawyers who act as either issuer’s or underwriter’s counsel for over fifty energy companies, utility holding companies and utilities.
Unlike many other law firms, our power and energy capital markets practice focuses principally on trends and developments in the power and energy industry. By coupling this unique focus with our capital markets background and our broad client base, we believe we possess a level of market intelligence that is unparalleled by a law firm practicing in the power industry. In addition to contributing to other publications throughout the year, our lawyers publish a periodical, BASELOAD: Current Topics in Energy Capital Markets, several times a year to provide clients with insight into our experiences. Issues of BASELOAD are available on hunton.com.
Our lawyers regularly act as designated counsel to underwriters for many prominent domestic utilities and their respective subsidiaries. In this capacity we represent, on a regular basis, most of the major investment banking firms involved in the power and energy sector. We also act as issuer's counsel to several US utilities and have acted as issuer's counsel with respect to US capital markets matters for various foreign utility companies in the UK and Australia. We have experience in all aspects of corporate finance with particular familiarity in public and private debt offerings both in the US and abroad, public and private equity offerings, liability management transactions, mortgage and other secured debt financing, equity derivatives, interest rate and currency swaps and other derivative products, hybrid securities, registration rights, reporting and compliance with the Securities Exchange Act of 1934 (including requirements associated with the Sarbanes-Oxley Act and the Dodd-Frank Act) and secured and unsecured commercial borrowings. Due to the depth of our experience, lawyers of the firm have been retained by certain investment banks as "special products counsel." Our work in this regard often involves the design of innovative and complex financing techniques for use in the power and energy capital markets.
A brief overview of some of our transactions in the power and energy capital markets sector includes:
Our lawyers have extensive experience in public offerings of equity and debt securities. We have represented both issuers and underwriters on various multi-billion dollar global debt offerings in the utility industry. Over the years, we have represented various underwriters in multiple offerings by utility companies and holding companies into the equity capital markets and assisted issuers and agents in the establishment of multiple periodic equity distribution programs. We acted as issuer's counsel with respect to a foreign utility company's initial public offering of debt into the US capital markets. We have acted as issuer’s and underwriter's counsel in multiple issuances of first mortgage bonds and general and refunding mortgage bonds for various utilities and have drafted several modern mortgage bond indentures for electric and gas utility companies. We have also assisted various utilities in establishing MTN programs (secured and unsecured) and continuous equity programs.
Hunton & Williams has represented both issuers, underwriters and initial purchasers in multiple non-public transactions under Rule 144A/Regulation S, Section 3(a)(2) and Section 3(c)(7). These offerings have included cross-border offerings and highly structured derivative based debt instruments as well as straight debt for domestic companies. Many of these offerings include registration rights providing for the registration of the debt under the Securities Act of 1933 after the initial offering. We have also been involved in numerous institutional private placements, representing both issuers and purchasers.
Debt-Equity Hybrid Financing
Our lawyers have been intimately involved in these products since their inception in the mid-1990s. These securities are designed to have many features normally associated with equity securities but retain the favorable tax treatment afforded to debt securities. We have been retained as "special products counsel" by various investment banks regarding the structural and tax aspects of these securities. We have represented both issuers and underwriters in issuances of various types of subordinated preferred stock, preference stock, convertible bonds, preferred securities, remarketable or redeemable securities, equity units and other mandatorily convertible products. We have represented various investment banks in remarketings of the debt component of the equity unit products and have acted as counsel to dealer managers in connection with cash tender offers for, and induced conversions of, equity-linked debt securities and convertible notes. We have also represented several issuers and underwriters with respect to issuances of "new generation" hybrid securities.
Private Activity Bond Financing
Hunton & Williams has long had an active practice in the area of private activity bond financing. We are a national leader in the tax-exempt financing field with broad experience in federal tax and securities laws and regulations applicable to tax-exempt financings. Our representations include roles as bond counsel, conduit obligor's counsel and underwriter’s counsel. We regularly work with many different financing vehicles, including letter of credit-backed "lower floater" structures, and have made significant contributions over the years to "multi-modal" bond structures. We were extensively involved with the crisis in the auction-rate bond market and assisted numerous utilities in their exit from that market. Recently, we have been involved with several project financings that have accessed the private activity bond market to obtain tax-advantaged capital.
Dedicated Utility Rate Securitization
Our lawyers have served key roles in a majority of the recent dedicated utility rate securitization transactions. We have represented underwriters in nine of the last fourteen transactions completed in this space since 2008, including an $800 million stranded cost bond issuance that was recognized by International Financing Review ("IFR") as the "Americas Securitization Transaction of the Year" in 2008.
In addition to our role as underwriter's counsel, our lawyers have served as company counsel in connection with stranded cost securitization transactions completed in Montana and New Jersey and have advised several utility companies in drafting state securitization statutes.
Our lawyers have extensive experience in structuring and documenting a wide variety of liability management transactions, including tender offers, registered and exempt exchange offers, open market purchases and consent solicitations. We have represented both companies and dealer managers in straight debt tender offers, "waterfall" tender offers and tender offers for convertible notes, mandatorily convertible securities, equity units and trust preferred securities. We have experience with many types of exchange offers with recent deals including an exempt exchange offer/consent solicitation involving preferred stock and a novel debt-for-debt exchange conducted on a Dutch auction basis. We have acted as both counsel to the initial purchasers and dealer managers for two different transactions wherein a 144A offering was followed immediately with a private exchange offer for an outstanding series of the issuer’s debt. We have also advised many companies on strategies for engaging in open market purchases of securities and avoiding "creeping" tender offer issues.
Our lawyers helped structure and execute a novel equity derivatives transaction for a utility holding company in the second quarter of 2010. We represented the sales agent in a periodic equity distribution program that contained a forward component allowing the issuer to issue stock in the future based on its current price. At the time, this was the first utility to utilize the forward structure in conjunction with an equity distribution program—and only the second time overall. We have also represented the underwriters in several follow-on forward equity issuances by utility holding companies.