Public Finance

The McNees Public Finance Group has extensive experience in representing issuers and other participants in municipal bond transactions.  We have served as bond counsel to many state and local government issuers.  Our state clients have included the Commonwealth of Pennsylvania in general obligation issues and many state agencies in various types of revenue issues.  These state agencies include the Commonwealth Financing Authority, the Pennsylvania Turnpike Commission, the Pennsylvania Economic Development Financing Authority and the State Public School Building Authority.  We have also served as special tax counsel to the Pennsylvania Higher Education Assistance Agency.

Our local government bond counsel clients have included many counties, cities, boroughs, townships, school districts and authorities across Pennsylvania, such as Lancaster County, Cumberland County, Dauphin County, the City of Lancaster, the City of Easton, West Chester Borough, Hummelstown Borough, Derry Township, Swatara Township, Athens Area School District, Columbia Borough School District, Mount Pocono Municipal Authority and Pittsburgh Water and Sewer Authority.

In addition to serving as bond counsel to issuers, we also represent other participants in financings including for-profit and nonprofit borrowers, underwriters, banks, trust companies and other financial institutions.  The nonprofit borrowers we have represented include many healthcare and higher educational institutions, such as Evangelical Community Hospital, Hanover Hospital, Dickinson College and Elizabethtown College.

The transactions in which we participate involve the funding of new capital projects and the refinancing of existing debt.  We have extensive experience with all types of debt structures, including competitive and negotiated underwritings, fixed and variable rate debt, derivatives, credit enhancement, large direct placements with banks or insurance companies, and more traditional tax-exempt bank loans.

We advise issuers and underwriters on compliance with continuing disclosure obligations and other securities law matters and with various tax requirements such as multipurpose allocations, qualified hedges, reissuances and rebate requirements.

In addition to financings, we also work with governments on related public finance matters such as the legality of various types of investments, the sale or leasing of assets, and the relationship between municipalities and their authorities.  For example, we served as bond counsel and transaction counsel to the Lehigh County Authority, a large regional water and sewer authority, in connection with its issuance of over three hundred million dollars of Water and Sewer Revenue Bonds (City of Allentown Concession), Series 2013. The Authority was selected, through a bidding process, to enter into a concession agreement with the City of Allentown for the operation and improvement of the City’s water and sewer system under a concession agreement for 50 years.  We also represented the Authority in the negotiation of the concession agreement, which involved a complicated set of financial, operational, regulatory and labor issues. The City applied the proceeds from the concession to its unfunded pension liability.  The transaction enabled the Authority to expand its existing regional water and sewer system.

This was the first public-public transaction of its kind, and The Bond Buyer recognized it as the co-deal of the year for the Northeast United States in 2013.  The complex structure included differentiating the City’s system from the systems under the Authority’s existing security structure. The financing included a combination of current interest bonds, capital appreciation bonds, and taxable bonds.  As a strong, large, AA-rated entity, the Authority is able to provide more efficient operation of the system and more control over future rate increases.  The City found a solution to its difficult pension situation from this asset transaction while maintaining long-term ownership of the asset.

We have since represented other municipalities in water and sewer concession transactions similar to the Lehigh County Authority – Allentown concession. For instance, we represented the Borough of Middletown in connection with the bidding, selection, and negotiation of a concession of its water and sewer system, which closed in December 2014. We are the only firm in Pennsylvania to have represented both parties in these types of transactions.

McNees was ranked fifth in Pennsylvania in the 2016 Bond Counsel Rankings by The Bond Buyer. The firm also was ranked fourth in Pennsylvania in the 2016 Bond Underwriter’s Counsel, and is one of just two firms to appear in the top five in both lists. In 2013, McNees was ranked the number one Pennsylvania bond counsel firm by dollar volume, according to The Bond Buyer’s annual publication of top Bond Counsel firms. Our firm was noted as having served as bond counsel on issues totaling more than $1.4442 billion.

The Public Finance Group takes the McNees motto of “Clients First” very seriously. For example, when we represent an issuer as bond counsel, we do not view ourselves as solely part of the “finance team” that is trying to get the transaction done, and we do not view ourselves as just technical legal experts on tax and securities matters; rather, we also view ourselves as the issuer’s lawyers with a specific duty to look out for and represent the issuer’s best interests in cooperation with the issuer’s solicitor.  We embrace our role as “advisor” to the issuer under Rule 2.1 of the Rules of Professional Conduct.  We are there to protect the issuer to the best of our ability and to provide the issuer with direct and practical advice on what we think the issuer can or should do.

Continuing Disclosure
Our public finance professionals are able to assist issuers and obligated person clients in complying with their continuing disclosure requirements under SEC Rule 15c2-12. We can offer such continuing disclosure-related services as creating and maintaining compliance templates for operating and financial data, undertaking continuing disclosure filings for issuer and obligated parties and creating model policies and procedures. Additionally, we will monitor continuing disclosure trends, review and provide advice on current continuing disclosure obligations and provide continuing disclosure training as requested and required.

We will also provide continuing disclosure compliance review services for underwriters and financial advisors to determine whether remedial action and disclosure of past filing failures is necessary prior to the publication of preliminary offering documents.

Related Practices/Industries