Public Finance Credit Enhancement/Direct Purchase

​Orrick is one of the few law firms in the country with expertise in all areas necessary to provide effective representation to credit enhancers of government obligations, such as banks, insurance companies, pension funds, sureties or other financial institutions.

Our Public Finance Credit Enhancement/Direct Purchase Group combines the expertise of our commercial finance practice with our public finance bond counsel practice (generally ranked first in the country) to offer a credit enhancer or direct purchaser expert advice on creditors’ rights in general and on public entities’ rights in particular.

Public vs. Private Borrowers: Rights and Restrictions

Public entities are governed by different laws and have very different rights and obligations than private borrowers.  For example, unlike private borrowers, public entities have few implied powers. They operate under significant limitations on their ability to incur debt and other liabilities (including indemnities and other contingent liabilities), and under restrictions on remedies that may be enforced against them. Public entities are subject to separate bankruptcy statutes and different rules governing the perfection of security interests.  In addition, while private obligations are generally backed by the general credit of the obligor or specific collateral, public entities employ a vast array of limited obligation security structures to comply with or avoid their peculiar legal restrictions.

Breadth of Experience

Lawyers in our Public Finance Credit Enhancement/Direct Purchase Group have considerable experience in such areas as:

  • insurance law
  • environmental law
  • letters of credit and liquidity facilities
  • securities law
  • secured transactions
  • creditors’ rights
  • bankruptcy
  • interest rate swaps and derivatives
  • bank regulation (including capital adequacy requirements)

We also draws upon the considerable expertise of our Municipal Distressed Debt and Bankruptcy Group and our Real Estate, Structured Finance, and Project Finance practices—areas of law that have become increasingly important to lenders and other providers of credit.

  • Innovative Credit Enhancement Solutions

    The types of debt we have handled include private activity bonds, bonds for not-for-profit organizations, public infrastructure bonds, lease/certificates of participation, public enterprise revenue bonds, general obligation bonds and notes, tax increment bonds, sales tax bonds, delinquent tax bonds, tax and revenue anticipation notes, derivative products, and other financing instruments.  In addition to reviewing the bond documents to ensure that the credit provider’s rights are protected, we prepare and negotiate the credit, liquidity facility, direct purchase or other financing documents, including the following.

    • Letters of credit and reimbursement agreements
    • Standby purchase agreements
    • Revolving credit agreements
    • Pledge and collateral agreements
    • Participation agreements
    • Investment agreements
    • Swaps, puts, options, caps, floors and other similar agreements
    • Deeds of trust and other mortgage documents
    • Bond purchase agreements
    • Continuing covenant agreements
    • Standard "drop in" indenture and loan agreement provisions

    We have been instrumental in structuring innovative bond and lending transactions on behalf of our credit enhancement and direct purchase clients as well as aiding some of those clients in workouts including the divestiture or sale of nonperforming assets.  Our unique position in the public finance market allows us to not only respond to our clients’ needs, but to actually add value to the transaction.

    Orrick provides innovative and practical legal advice to help our clients meet their objectives. For more information about our firm or our Public Finance Credit Enhancement/Direct Purchase  lawyers, please contact [email protected].