Municipal Finance

Duane Morris delivers targeted, cost-effective municipal finance counsel to clients nationwide. Clients draw on experienced lawyers who have advised clients on virtually every type of municipal finance deal - from parking facility financings to billion-dollar stadium transactions. This broad base of knowledge translates into a legal team that hits the ground running offering competitive billing rates. It also means each transaction is staffed in an efficient manner, providing clients with continuity and a high degree of responsiveness.

Duane Morris' municipal finance attorneys have been included in the "Red Book" for more than 25 years. We bring to clients strong professional relationships with local governmental and regulatory authorities across the firm's U.S. locations. On a daily basis, our municipal finance lawyers work closely with borrowers, bond issuers, underwriters, credit providers, trustees and other parties to help ensure that our clients' matters are handled expeditiously.

To pursue each client's objectives, our lawyers often are innovators and pioneers on new legal ground. For example, one of our attorneys was bond counsel in a tax-exempt airport financing for a $115 million passenger terminal facility at JFK International Airport. The financing involved several novel issues, such as tax compliance in the case of a non-U.S. taxpaying foreign airline and the use of bonds to acquire an existing leasehold interest previously bond-financed by another airline. Because of creativity and commitment to completing each deal on time and within budget, clients have included us in nearly 250 transactions involving almost $12 billion of tax-exempt debt over the past decade.

We often work closely with other Duane Morris practice groups such as corporate, commercial finance, affordable housing, real estate, business reorganization and tax to assist our clients in solving problems. In addition, our lawyers frequently coordinate their work with that of our clients' government relations consultants, including Duane Morris' affiliate Duane Morris Government Strategies.

Municipal Finance Services

We assist clients in all facets of a general obligation and revenue bond practice, advising on various types of fixed and variable rate financings, insured and letter of credit financings, and new money, current refunding and advance refunding bond financings. Our lawyers have worked on transactions that have included tender option bonds and financings involving derivative products, such as various types of swaps, floater/inverse floaters, auction rate securities and interest rate cap and collar transactions. The full gamut of market participants turn to us for advice, including underwriters, bond issuers, letter of credit issuers, bond insurers, trustees and recipients of the proceeds of conduit financing.

In addition to handling new issues, the firm counsels clients on ongoing disclosure and other covenant and regulatory compliance matters. We guide clients on the creation of municipal authorities to issue bonds for projects. Clients receive the firm's high quality federal tax analysis required by all types of municipal finance transactions.

Representative Experience

While Duane Morris' Municipal Finance Practice has depth and variety, the firm's most extensive experience is in the following areas:

Housing
Education
Healthcare
Infrastructure and Water Projects
Energy
Industrial Revenue and Economic Development Bonds
Transportation
Credit Support - Banks
Credit Support - Insurers
Underwriter's Counsel
IRS Representation


Housing:

We have handled financing for multifamily housing projects, single-family mortgages and home improvement loans and other community development projects through bond issuances by various state housing financing agencies and local redevelopment authorities. Our lawyers have experience working on financings with agencies, such as the New York State Housing Finance Agency, Maine State Housing Authority, West Virginia Housing Development Fund and the North Carolina Housing Finance Agency.

We have handled all types of tax-driven real estate investments, including historic rehabilitation tax credit transactions, federal and state low-income housing tax credits, real estate tax abatements and tax-exempt bond financing. Through our representation of for-profit developers, nonprofit organizations, syndicators, banks and underwriters and bond counsel engagements, our affordable housing practice has been involved in the financing of more than 1,000 projects consisting of more than 100,000 housing units in 18 states.

Education:

We have provided counsel on numerous school district bond issues, as well as financings for various colleges and universities through state and local educational facilities authorities. The firm served as transaction counsel and bond counsel in the sale and securitization of the first ever tax lien securitization to be undertaken in the Commonwealth of Pennsylvania on behalf of the city of Philadelphia and the school district of Philadelphia.

Healthcare:

We have represented a variety of continuing care retirement communities, long-term assisted living facilities and nursing homes, including with respect to tax-exempt financing. The firm regularly acts as underwriter's counsel for numerous issues for hospitals and long- term care facilities and as sponsor's counsel on several tax-exempt bond pools for financing healthcare facilities.

Infrastructure and Water Projects:

We have handled financings for port facilities for the cement and oil industries; water and sewer systems; wastewater treatment plants; criminal justice and detention centers; prisons; transportation systems; parking garages; airports; solid waste recovery facilities; and public power. Our municipal finance team draws on the extensive experience of the firm's environmental lawyers to ensure regulatory compliance in solid waste disposal and resource recovery facilities financings.

We were instrumental in the financing of one of the first resource recovery transactions done on a project finance basis, using a formulaic tipping fee as security supporting the debt and operations of the plant. Our lawyers have also been involved in the equity infusion of capital for resource recovery projects through short-term debt, later replaced by leveraged lease financing. We have also helped to finance waste paper recycling facilities. In addition, we have represented waste facility owners in complex restructurings, including service agreement renegotiations and system security enhancements.

Energy:

We have represented various parties in connection with public power projects, using both system and project finance approaches. In 1998, our lawyers were involved in the largest single municipal power transaction in the United States. Duane Morris lawyers have also been involved with complex cogeneration facilities involving the provision of power, as well as reliable heating and cooling to terminal facilities at New York airports. For example, we provided tax advice in connection with a utility's billion-dollar recapitalization plan, including providing the methodology for allocation of assets among bond issues and handling several bond redemptions and asset exchanges to cure potential private use.

Industrial Revenue and Economic Development Bonds:

Duane Morris regularly represents various parties in connection with the issuance of industrial revenue and economic development bonds acting as bond counsel, underwriter's counsel, letter of credit bank counsel and borrower's counsel.

Transportation:

We have represented various parties in connection with mass transit, commuter transit, intercity rail, light rail, airports, ports, bridges, tunnels, terminal facilities, toll roads, parking garages and other transportation facilities. Our lawyers were involved in the original structuring of the Metropolitan Transportation Authority's financings, including the first MTA revenue bonds and cross-border Canadian export development financing of subway cars.

We have advised the Delaware River Port Authority in its toll and rate-making procedures, and in connection with the bond offerings, which were a result of the dramatically increased debt capacity permitted by these revised rates and tolls. We have served as underwriter's counsel in connection with the Southeastern Pennsylvania Transportation Authority's financing backed by state grants. We have represented the Philadelphia Parking Authority and served as its bond counsel in connection with numerous airport and urban parking garages. We were involved in the General Airport Revenue Bonds issued to expand the Philadelphia International Airport, adding two new terminals and modernizing its facilities.

Credit Support - Banks:

We have represented foreign and domestic banks in securing all types of municipal transactions. We have assisted banks in a resource recovery transaction that was closed in a difficult six-week time frame, notwithstanding its project finance structure. Our lawyers have also assisted banks in financing arenas, stadiums and conference centers, as well as more traditionally secured and structured transactions. Duane Morris lawyers have structured letter of credit and bond insurance enhanced charter school financings in the Commonwealth of Pennsylvania. We have also represented continuing care retirement communities, hospitals and other life care projects.

Credit Support - Insurers:

We regularly serve as counsel to Radian Asset Assurance Inc. in connection with its more highly structured transactions, including particularly the variable rate, multimodal and auction rate bonds Radian insures for colleges, hospitals, nursing homes and other healthcare facilities. We also represent Radian in connection with the negotiation of interest rate swaps, caps and investment agreements in connection with its insured transactions. In addition, we have represented state and federal governmental and quasi-governmental entities in their capacity as insurers of bond transactions and the mortgages underlying bond transactions.

Underwriter's Counsel:

We have represented international, national and regional underwriters in all types of municipal transactions. Duane Morris lawyers served as underwriter's counsel on several unrated assisted-living housing facility transactions in New Mexico and on several insured single-family mortgage bond transactions for the Delaware State Housing Authority. In addition to those transactions, our lawyers acted as underwriters' counsel in the two new stadium projects for the Philadelphia Phillies and the Philadelphia Eagles Limited Partnership.

IRS Representation:

Duane Morris regularly represents clients before the Internal Revenue Service in bond audits and requests for rulings. A member of our Municipal Finance team successfully guided one of the country's largest water and sewer districts through a yield-burning audit of its nine-figure bonds by both the IRS and the Securities and Exchange Commission, resolving disclosure issues concerning public knowledge of the audits and negotiating a separate settlement agreement with the IRS.

Representative Matters

  • Bond counsel in a series of tax-exempt airport financings, including a $115 million passenger terminal facility at John F. Kennedy Airport. The financings involved several novel issues, such as tax compliance in the case of a non-U.S. taxpaying foreign airline and the use of bonds to acquire an existing leasehold interest previously bond-financed by another airline. Other issues involved structuring maturities and call provisions around the expected termination of the New York City ground lease to the port authority in 2015.
  • Counsel to Montenay Montgomery Limited Partnership (MMLP) in a $125.28 million refinancing of its waste-to-energy plant in Montgomery County, Pennsylvania. The primary customer of MMLP, a special purpose entity, is the Waste System Authority of Eastern Montgomery County. Electricity generated at the facility is sold to PECO Energy. As part of the refinancing, MMLP renegotiated its service agreement with the Waste System Authority and Montgomery County and was able to secure from the Authority various financial and operational covenants that enhanced the security of the system. The bonds are insured by MBIA. Moody's and S&P assigned underlying ratings of "A2" and "A" respectively to the bonds.
  • Counsel to the purchaser of a bond-financed facility in an approximately $100 million transaction involving the purchase of a residential rental facility with more than $60 million of pre-1986 tax-exempt bonds and UDAG funds. Our client desired to acquire the facility and convert it to condominium use. The transaction involved bond credit enhancement in the form of a letter of credit backed by a surety bond that restricted the borrower's defeasance rights. We evaluated applicable tax requirements and defeasance procedures and the extent that steps could be taken toward creating the condominium prior to the defeasance of the bonds. Ultimately, the bonds were defeased and the building converted.
  • Transaction counsel and bond counsel in connection with the sale and securitization in June 1997 of the first-ever tax lien securitization to be undertaken in the Commonwealth of Pennsylvania. The city of Philadelphia and the school district of Philadelphia each securitized their respective interests in delinquent real property taxes having an aggregate face value of approximately $190 million. The transaction involved the issuance of more than $75 million of bonds collateralized by tax claims. As transaction counsel, Duane Morris, in conjunction with its co-counsel, structured and implemented the transaction and the bond financing. The proceeds from the bond financing were used by the issuing authority to pay the purchase price of the tax claims, with the city and the school district each receiving an amount corresponding to their respective interests in the tax claims. As a result of over-collaterization, both the City and the School District also each received a note in an amount representing the residual value of the tax claims after the maturity of the bonds.
  • Trustee's counsel for more than $63.7 million of tax-exempt bonds affected by court decisions invalidating solid waste flow control statutes and regulations. We provided advice regarding the trustee's disclosure obligations to bondholders and participated in extensive litigation proceedings in state and federal court concerning the de facto deletion of a key provision of the indenture relating to the security for the bonds and in regulatory proceedings before the state agency regulating environmental matters. The proceedings were ultimately settled simultaneously with the refunding of the bonds.
  • Underwriter's counsel in connection with the issuance of more than $300 million of bonds, in a $1 billion transaction of the Philadelphia Authority for Industrial Development to build new stadiums for the Philadelphia Eagles and the Philadelphia Phillies. We are also representing the providers of the balance of the financing for the stadiums in addition to the bond financing. These transactions provided the Eagles and the Phillies with separate state-of-the-art playing facilities opened in 2003 and 2004.

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Diversity

"In my discussions with Duane Morris leaders, they frequently speak about how diversity within their firm has enabled them to better serve their diverse clients. They understand that investing in diversity is a wise business decision that positions them for the marketplace of the future."

Don Liu
Senior VP, General Counsel & Corporate Secretary
Xerox Corporation

At Duane Morris, achieving diversity is paradoxical. By supporting and celebrating the differences of our attorneys - and the individual strengths that they bring - our firm culture expands, fostering creative solutions for our clients. But diversity at Duane Morris does not mean that we have a certain number of diverse attorneys; true diversity means that it is no longer noteworthy to see diverse lawyers leading our practice groups or managing client relationships. Ascending to positions of leadership and greater responsibility and providing the highest levels of client service is simply what is expected of all our lawyers. Diversity is another strong asset that adds to our collective abilities to meet the needs of our clients.

Our vision of diversity at Duane Morris is to realize an environment in which our lawyers' outstanding qualities are not just measured by ethnicity, race, gender and sexual orientation, but more importantly, that our lawyers are remarkable as excellent attorneys above all else. Only then can we celebrate our differences while focusing on the common pursuit of legal excellence which everyone shares at Duane Morris.

To reach this goal, Duane Morris understands that the familiar diversity strategies and policies that most law firms have are needed. Without demanding results from such policies, most law firms are bound to fail in even achieving numerical hiring and retention goals. Duane Morris has been proactive and ambitious in its efforts to improve diversity at the firm, and has set deadlines for reaching the milestones which mark our progress. To create a more diverse law firm, Duane Morris is:

  • Committed to strategically increasing our diversity levels, which is currently at 10 percent.
  • Bringing together our Diversity Committee and our Hiring and Retention Committee to raise diversity as an important factor in our hiring decisions.
  • Dedicated to improving retention by building upon our monitoring and mentoring program for all diverse associates.

Combining new initiatives with our longstanding diversity efforts, Duane Morris has seen increasingly positive results. In the Minority Law Journal's annual diversity survey of the nation's largest 260 firms, Duane Morris continued to improve its regional and national ranking, rising to number 136 of all firms surveyed. Our strides in Philadelphia are encouraging; in a city known for both the racial diversity of its population and the lack thereof in its law firms, Duane Morris is one of only two law firms to exceed the national average of minority partners at all law firms. Additionally, Duane Morris leads all national law firms based in Philadelphia in the number of Latino partners. Nearly 30 percent of all of our attorneys are women, and more than 20 percent of our partners are women.

In our approach to diversity, progress in racial, gender and cultural diversity cannot be measured in numbers alone. Duane Morris has focused our diversity initiatives on both increasing the number of diverse associates and addressing the challenges diverse attorneys face in building lasting careers and rising to senior and leadership positions. While several of our key practice groups are led by diverse partners and female partners, Duane Morris endeavors to create a culture which will foster a deep pool of such attorneys who can then develop into the firm's future leaders. Duane Morris understands that simply hiring diverse associates will not change the diversity of the firm; Duane Morris is working to mentor and retain diverse associates so that our progress in racial, gender and cultural diversity is also reflected at the highest levels of leadership within the firm.

Our progress on gender diversity has been profound. We have no glass ceilings: women hold positions of leadership at all levels of management at the firm. Women lead a number of our key practice groups, including our Energy, Immigration and International practices, and serve on the firm's Executive Committee. The success of our female attorneys at Duane Morris has not gone unnoticed. Barbara Adams was chair of the firm's Finance Practice until her appointment by Pennsylvania Governor Edward Rendell to serve as General Counsel of the Commonwealth. In 2004, our longtime General Counsel, Gene E.K. Pratter, was approved by the United States Senate and is now a judge for the U.S. District Court for the Eastern District of Pennsylvania.

Our efforts to improve diversity extend beyond our firm's walls. The chair of our Diversity Committee, Nolan N. Atkinson, Jr., recognized the lack of diversity in Philadelphia's legal community and formed the Philadelphia Diversity Law Group. Nolan now serves as the chair of the organization, a consortium of 25 law firms and corporations that commits to employing at least one diverse first-year law student each as a summer associate. From this program, law students of diverse backgrounds gain access to what was once an exclusive legal community, and now have the opportunity to learn and develop their legal careers with experience at Philadelphia's top law firms.

In addition to our involvement in the Philadelphia area, Duane Morris has increased our presence at national conferences and events focused on diversity. We sponsor the Hispanic National Bar Association and its job fair. Duane Morris is also a longtime supporter and sponsor of the Equality Forum, a national gay and lesbian rights organization. Duane Morris continues to sponsor the Minority Corporate Counsel Association, and is active in other associations of diverse attorneys including: the Asian American Bar Association of the Delaware Valley; the Charles Houston Bar Association; Cuban Bar Association; Korean American Lawyers Association; National American Indian Housing Counsel and the National Bar Association.

The challenge of improving gender, ethnic and cultural diversity at Duane Morris is an ongoing effort that has the support of the entire firm. Duane Morris has been at the vanguard in supporting gender diversity throughout the firm beginning a generation ago. Our diversity programs are leading to similar success in improving racial and national origin diversity at Duane Morris. But even as we share these examples of Duane Morris attorneys and our involvement in numerous legal events, associations and programs for diversity, our hope is that such examples will no longer be necessary to mention in the future. We hope that through our efforts, and the efforts of other law firms, these stories become so common that they are no longer the remarkable accomplishments they are today, but simply routine aspects of the legal world tomorrow.