Publication & News

Subscribe to this RSS feed.

Butler Snow and Morgan Keegan Complete First Recovery Zone Bond for State of Mississippi

Butler, Snow, O’Mara, Stevens & Cannada, PLLC, (Butler Snow) and Morgan Keegan & Company, Inc. announce the completion of the $3.65 million sale of Recovery Zone Economic Development Bonds  (RZEDB) issued by Jones County, Miss., the state’s first municipal debt issuer to take advantage of this federally subsidized program. Butler Snow acted as bond counsel for Jones County. Morgan Keegan served as underwriter and Government Consultants, Inc., served as financial advisor.

According to Gavin Murrey, managing director of Morgan Keegan’s public finance office in Memphis, “The Recovery Zone Bonds provided the opportunity for the county to finance needed improvements. They were able to utilize this unique program to benefit the citizens of Jones County.”

Butler Snow has represented Jones County on various opportunities since 2005. “We hope this transaction will serve as a prime example for other counties in Mississippi on ways to benefit from The American Recovery and Reinvestment Act,” said Don Clark, Chairman, Butler Snow. “The Recovery Zone Economic Development Bond will provide Jones County with significant opportunities, and may allow them to consider projects that might not otherwise be attainable.”

RZEDBs, the $10 billion federally subsidized program that permits local governments to sell taxable bonds instead of tax-exempt bonds, was created by the American Recovery and Reinvestment Act  of 2009 to aid areas of the U.S. affected during the recession. The taxable securities are eligible for a 45 percent rebate on interest costs from the U.S. Treasury. The $3.65 million of RZEDBs sold by Jones County represent the county’s allocated capacity from the federal government for this type of bond. The offering also included the sale of $5.67 million of bank qualified tax-exempt bonds.

Several factors contributed to the appeal of the offering, according to Lindsey Carter, associate vice president at Morgan Keegan and head of the transaction’s underwriting team. Carter cited the insurance against default by Assured Guaranty Corp., general obligation backing of the county and the county’s A+ ratings upgrade from Standard & Poor’s as key factors that attract investors.

“The RZEDB program allows issuers to offer investors attractive yields and, in the case of Jones County, reduced risks provided by bond insurance and the county’s strong municipal credit,” Carter said. “The successful completion of the offering was also helped by the firm’s distribution capabilities and, by strong retail participation.  With this new category of bonds, Butler Snow’s detailed advance work was critical. Their due diligence paved the way for a successful transaction.”   

Butler Snow has served as bond counsel to over two-thirds of the counties and numerous cities in the state of Mississippi as well as school districts, utility and economic development districts. In the past, Butler Snow has also served as bond counsel to the State of Mississippi, the Mississippi Hospital Equipment and Facilities Authority, the Mississippi Development Bank, Mississippi Home Corporation and the Mississippi Business Finance Corporation. The firm routinely provides underwriting counsel to many of the largest investment banking firms involved in Mississippi financing.
 
“With our vast bond experience as a firm as well as our extensive knowledge of the American Recovery and Reinvestment Act, we had the expertise to help Jones County adapt the RZEDB structure quickly and take advantage of the opportunity,” said Michael Russ, attorney and member of Butler Snow’s Stimulus Response Team. “Working with a true partner like Morgan Keegan strengthened our ability to provide a seamless and thorough counseling process.”

According to Charles Miller, Jones County Administrator, Butler Snow and Morgan Keegan provided valuable insight into the RZEDB program.

“Jones County is grateful for the exceptional counsel Butler Snow and Morgan Keegan provided on our bond issue,” said Charles Miller, Jones County Administrator.  “Both firms were very knowledgeable on the Build for America Bonds and took the time to explain every step of the process to the County.”