Practice/Industry Group Overview
Members of our Energy Industry team have significant experience in structuring project financing and raising capital in the credit and capital markets for energy companies involved throughout the energy value chain. We have helped clients raise billions of dollars for the development, construction and acquisition of energy assets, including financing structured as non-recourse and limited recourse project or acquisition debt, corporate debt, and equity financings. The types of transactions in which our attorneys have been involved are extensive, but have included secured and unsecured revolving and term loan facilities, synthetic and leveraged leases, tax abatement and pollution control bonds, and the private placement and public offering of equity and debt securities.
We are intimately familiar with the credit structures commonly used to support project-based financing of energy assets, including power and commodity tolling agreements, off-take obligations, subordinated debt, and the pledge of project contracts and assets. Our lawyers are also well-versed in the wide array of commodity, power, credit, weather and financial hedges, swaps, and other derivatives.
Debt and Equity Capital Markets
Our attorneys have extensive experience helping energy companies, including investment grade and non-investment grade energy companies, raise capital in the debt and equity capital markets. Working actively with Husch Blackwell's other practice groups (particularly, our Banking & Financing and Securities & Corporate Governance groups), we bring together the necessary product expertise to provide our energy clients with an efficient and creative team able to provide the right strategic support and advice for virtually any energy-related transaction in the capital markets. Selected transactions are listed below:
- Represented a NYSE public utility in Rule 144A private placement of $500 million of senior notes and subsequent exchange of the senior notes into registered senior notes pursuant to registration rights agreement.
- Represent a NYSE renewable energy investment fund that invests in companies in the renewable energy sector, including its initial public offering of securities.
- Represented Independent System Operator in its initial Rule 144A private placement of $100 million of senior notes.
- Represented a public utility in retiring $350 million of registered debt securities through a “waterfall” cash tender offer involving the solicitation of five series of senior notes on a fixed-spread and a fixed-price basis.
- Represented a NYSE public utility in offering 46 million shares of common stock to public investors.
- Represented a public utility in a registered public offering of $345 million of mandatory convertible debt securities and subsequent tender offer in which the convertible debt securities were exchanged for shares of common stock and cash.
- Represented a public utility in issuing $430 million of first mortgage bonds secured by regulated gas and electric utility assets in four states.
- Represented a NYSE public utility in its tax-free spin-off of a 20 percent equity interest in its merchant energy subsidiary and subsequent repurchase, via exchange offer, by the public utility of the 20 percent stake.
- Represented a Canadian finance subsidiary of a domestic public utility in a Rule 144A placement of $200 million of senior notes guaranteed by the public utility, and subsequent exchange of senior notes into registered senior notes pursuant to registration rights agreement.
- Represented a public utility in issuing $300 million of first mortgage bonds secured by regulated electric generation and distribution assets located in Missouri.
Bank and Non-Traditional Loan Markets
Our attorneys have extensive experience with helping both investment-grade and non-investment grade energy companies raise capital in the traditional bank and non-traditional syndicated loan markets. We represent energy companies in a broad range of syndicated and single-lender credit facilities (including asset-based loans and leveraged cash flow financings), letter of credit facilities, and term loans. Selected transactions are listed below:
- Represented syndicate of international banks in a $240 million loan to finance Missouri's largest wind energy farm to date.
- Represented a public utility in arranging a syndicated $150 million revolving credit facility secured by the accounts receivable generated by regulated operations in five states.
- Represented a public utility in arranging a syndicated $300 million credit and letter of credit facility (having revolving and term loan components) collateralized by first mortgage bonds secured by liens over the public utility’s electric generation and distribution assets.
- Represented a public ethanol company in arranging a $125 million credit facility from Farm Credit System lenders and a $38 million bridge loan facility supported by letters of credit.
- Represented a public utility in arranging $650 million of syndicated Term B loans comprised of (i) a $430 million term loan collateralized by first mortgage bonds secured by regulated gas and electric utility assets in four states and a pledge of equity interests in subsidiaries owning a Canadian electric utility business and 11 independent power projects, and (ii) a $220 million revolving credit facility, with a $110 million delayed draw option, secured by equity interests in subsidiaries owning gas and electric utility distribution businesses in Australia and subsidiaries owning three merchant peaking power plants located in Illinois and Mississippi.
- Represented a public utility in obtaining a $100 million short-term revolving credit facility secured by the equity interests in subsidiaries owning multiple peaking power plants and a lien over the generation assets comprising those facilities.
- Represented a private, multi-plant ethanol company in arranging a $50 million credit facility from a Farm Credit System lender.
- Represented a public utility in arranging a $200 million cash collateralized letter of credit facility, which included accordion features that permitted a reduction in the cash that must be posted as collateral as certain financial ratios and credit ratings were achieved.
- Represented a major institutional investor’s energy financial services unit in connection with arranging and participating in numerous energy-related credit facilities (including, among others, coal and oil transactions), in deals ranging from $50 million to over $500 million.
- Represented a public utility in structuring and arranging an unsecured $180 million credit and letter of credit facility supported by credit default swaps (i.e., the purchase of credit default swaps effectively allowed the public utility to purchase unsecured “capacity” available for cash borrowings and letters of credit).
Our lawyers have worked on a variety of project financings within the energy industry, including financings involving regulated and unregulated ethanol, power and gas assets, construction contracts, fuel supply and transportation agreements, and other operational agreements. The types of project financings in which our Energy Industry team lawyers have been involved are plentiful, ranging from lease financing arrangements to tax-exempt bonds to conventional construction loans. Selected transactions are listed below:
- Represented a public utility in financing, through a sale-leaseback transaction involving the issuance of non-recourse tax abatement revenue bonds, the development and construction costs associated with a 315 MW gas-fired regulated peaking generation facility.
- Represented a merchant energy company in financing, through synthetic lease facilities, $245 million of development and construction costs (including interest rate hedges) associated with two gas-fired peaking power generation facilities.
- Represented a public ethanol company in financing the operating costs of multiple ethanol plants through a $42.5 million credit facility with a Farm Credit System lender and $9 million in tax-increment financing.
- Represented a public utility in financing, via pollution control revenue bonds, the costs of acquiring, constructing, and installing (and, due to the existing sale-leaseback financing structure, leasing) certain pollution control equipment for a major coal-fired generating station.
- Represented a joint venture / borrower in financing, through a $270 million limited recourse project financing and $250 million tax abatement revenue bonds, the development and construction costs associated with a 580 MW combined cycle merchant generation facility.
- Represented a developer of oil-seed crush and biodiesel projects in financing, through USDA loan guarantee and tax-increment financing, costs associated with a program designed to bring new low-water use crop opportunities to traditional high-water use corn irrigation areas.
- Represented a merchant energy company in financing, through a synthetic lease facility, $265 million of purchase costs for 10 electric generation turbines and related equipment.
- Represented an ethanol developer in financing, through an initial equity investment by an Indian investor and $110 million of permanent debt financing arranged by a European bank consortium, the development, construction and initial operating costs of multiple ethanol plants.
- Represented a merchant energy company in financing $110 million of the development and construction costs of an underground natural gas storage facility in California.
- Represented a public utility in financing, via environmental improvement revenue bonds, the costs of acquiring, constructing, and installing certain solid waste facilities at a power plant.
- Represented a merchant energy company in financing $225 million of development and construction costs of the Crossroads Energy Center in Mississippi, which included the negotiation of an array of project documents and non-recourse revenue bonds.
- Represented a merchant energy company in negotiating a vendor financing arrangement with a multinational oil and gas producer, which involved the pledging of account receivables generated by various independent power projects and master netting arrangements.
- Represented a public utility in negotiating and arranging an accounts receivable sales program under which the utility would sell up to $130 million of undivided ownership interests in a revolving pool of utility trade receivables to multi-seller conduits administered by an independent financial institution.
- Represented a merchant energy company in negotiating and arranging a trade receivables sales program under which the company would sell up to $275 million of undivided ownership interests in a revolving pool of receivables generated by its wholly-owned power projects to a special purpose financing conduit.
- Represented an early stage investment fund in negotiating a second-round capital investment in advanced DDGS drying technology (offering energy and pollution reduction and enhanced co-products).
- Represented a multinational energy company in negotiating an $87.5 million promissory note issued to a joint venture partner in connection with the venture’s disposition of an electric distribution company in the United Kingdom.
- Represented public utilities in negotiating lock-box agreements and other arrangements necessary to separate, from a cash management perspective, funds generated by their regulated and non-regulated operations.