Orrick Advises Goldman Sachs and Calvert Foundation on the Nation’s First Environmental Impact Bond
Each year, our public finance tax lawyers structure many billions of dollars of tax-exempt financings and play pivotal roles in financings for governmental entities in 44 U.S. states and in several territories outside the U.S. The great diversity of Orrick’s practice (both geographically and in terms of the breadth of legal specializations we cover), together with our emphasis on sophisticated tax-driven transactions, gives Orrick unmatched strength in analyzing and opining on public finance tax matters and in crafting innovative solutions to tax-related problems. Orrick remains the national leader in developing new forms of financial instruments, including a variety of derivative products (e.g., options, synthetic variables, serializations, and asset securitizations).
Our reputation as leaders in public finance tax law affords the group ready access to U.S. Congressional, IRS, and Treasury Department staff for commentary on pending legislation, legislative history, regulations, rulings, and announcements relating to public finance, as well as for access to timely information about what these federal bodies plan to do or mean by what they have done.
The Public Finance Tax Group includes one partner who was the U.S. Department of Treasury’s principal attorney-advisor on municipal bond matters. The group includes a former chairman of the American Bar Association’s Tax Section; a past chairman of the National Association of Bond Lawyers; two past chairmen of the American Bar Association’s Committee on Tax-Exempt Finance; and a former chair of the General Tax Committee of the National Association of Bond Lawyers.
Orrick lawyers have obtained numerous IRS private letter rulings on the exemption from federal income tax of both interest on bonds and income of quasi-public entities and nonprofit corporations that issue or borrow the proceeds of bonds. Several of these rulings have established important substantive principles on which a number of financing techniques and devices are based.
Working in conjunction with The BLX Group , Orrick’s wholly-owned subsidiary, the Public Finance Tax Group is able to perform arbitrage rebate, refunding, and other tax-related calculations. We advise issuers on tax compliance both before and after the issuance of bonds.
The IRS and other federal agencies have greatly increased their scrutiny of the tax aspects of state and local government bonds. Orrick’s tax opinions are universally accepted and respected in all matters relating to public finance. Orrick tax lawyers have substantial experience representing issuers whose bonds have been audited or investigated by the IRS. This experience includes litigating and negotiating settlements with the IRS where the tax-exempt status of these bonds is called into question. In this era of increased technical complexity and federal scrutiny, Orrick’s Public Finance Tax Group offers an innovative, solution-oriented approach to public finance issues, combining thorough analysis, breadth of experience, and unparalleled reputation.
Orrick has assisted a number of governmental issuers in securitizing a variety of assets, including tobacco settlement payments for various counties in New York and California and for various states, transition surcharges relating to the restructuring of the electric industry, and tax receivables “rate reduction bonds” issued for the benefit of Pacific Gas and Electric Company, property tax receivable transactions for local governments in New York and California, as well as vehicle license fees in California.
Orrick has played important roles in a number of tax-exempt project financings, many of which involved creating the project ownership and operation structure. Notable transactions of this type include financings for mass transit and toll road projects, electric generation facilities, hotels, and entertainment facilities.
Assisting clients seeking ways to use tax-exempt financing to facilitate financial statement objectives, Orrick has developed transaction structures for utilities, hospitals, cities and counties, and other entities.
Orrick has broad experience in financings for both traditional non-traditional non-profit corporations, and non-profit corporations with revenue streams that do not commonly secure debt, such as museums, social service entities, and research entities. Tax-exempt financings for entertainment or hospitality entities, conservation entities, non-traditional housing entities and Indian tribal governments have become subjects of successful non-traditional financings.