Power and Utilities Capital Markets

Unlike many other law firms, our power and utilities capital markets practice focuses principally on trends and developments in the power and utilities 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 the Power and Utilities Capital Markets, several times a year to provide clients with insight into our experiences.

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 serve as issuer's counsel to several US utilities and have acted as issuer's counsel and underwriters’ counsel with respect to US capital markets matters for various foreign utility companies from the UK, Australia and Canada. We represented the underwriters in the first euro dominated debt issuance for a US utility system and have been involved in several “green bond” issuances. 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. Our representations often involve the design of innovative and complex financing techniques for use in the power and utilities capital markets.

A brief overview of some of our transactions in the power and utilities capital markets sector includes:

Public Offerings

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 equity and debt offerings in the utility industry. We acted as issuer's and underwriters’ counsel with respect to foreign utility companies’ initial public offerings of debt and hybrid securities into the US capital markets. We have acted as issuer’s and underwriters’ 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 distribution programs.

Non-Public Offerings

We have represented both issuers, underwriters and initial purchasers in non-public transactions under Rule 144A/Regulation S and Section 4(a)(2).  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 represented both issuers and underwriters in issuances of various types of subordinated preferred stock, preference stock, mandatorily convertible preferred stock, convertible bonds, preferred securities, remarketable or redeemable securities, equity units and other mandatorily convertible products. We have represented various issuers and 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.

Private Activity Bond Financing

Hunton Andrews Kurth 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. 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 either underwriters or sponsors/issuers in most of the transactions completed in this space since 2008, including a $1.6 billion storm bond issuance by affiliates of Entergy Corporation that was recognized by International Financing Review (IFR) as the “Americas Securitization Transaction of the Year”.  We recently represented Duke Energy Florida, LLC (DEF) on a SEC-registered offering of $1.3 billion nuclear-asset recovery bonds related to the early retirement of DEF’s Crystal River 3 Nuclear Plant.  In addition, our lawyers have advised several companies in drafting state securitization statutes.

Liability Management

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.

Equity Derivatives

Working in conjunction with our Derivatives Group, lawyers in the power and utilities capital markets practice have represented both issuers and underwriters in a numbers of equity derivative transactions. These deals have included forward equity issuances and accelerated share repurchase programs. Lawyers in our group have also represented the sales agent in multiple "at-the-market" equity distribution programs coupled with a forward component, including the first such “forward ATM” that was established by a domestic electric utility.