Hunton & Williams Advises on Appalachian Power Company $380.3 Million Consumer Rate Relief Bonds Offering

Hunton & Williams LLP advised Morgan Stanley & Co. LLC and RBS Securities Inc., as joint book-running managers, on an SEC-registered offering of $380,300,000 aggregate principal amount of senior secured consumer rate relief bonds by Appalachian Consumer Rate Relief Funding LLC, issued pursuant to a securitization structure. Consumer rate relief bonds are a category of utility rate reduction bonds issued on behalf of public utilities. Over $47 billion of utility rate reduction bonds have been issued to date.

Appalachian Consumer Rate Relief Funding LLC is a special purpose entity, wholly owned by Appalachian Power Company ("APCo"), created solely for the purpose of issuing the consumer rate relief bonds. The bonds were issued pursuant to a financing order of the Public Service Commission of West Virginia, issued pursuant to enabling legislation. The bonds are secured by consumer rate relief property comprised of the property, rights and interests of APCo or any successor under the financing order, which include the right to impose, charge and collect a special, irrevocable nonbypassable charge, paid by retail electric customers of APCo, or any successor, and the right to obtain annual and more frequent true-up adjustments to those charges. The consumer rate relief property was created at the time it was sold from APCo to Appalachian Consumer Rate Relief Funding LLC in connection with issuance of the bonds.

The Hunton & Williams LLP team included Steven Loeshelle, Michael Fitzpatrick and Adam O'Brian. Cary Tolley and Anna Page provided tax advice.