Comprehensive Experience That Gets Tax-Exempt Financing Done

If you need bond counsel, underwriter’s counsel or any other service for any tax-exempt financing, McNair is the law firm of choice – one that typically ranks at or near the top in recognized rankings of public finance firms in the region. We have not only represented the State of South Carolina and virtually every state agency and subdivision – we’ve also played a key role in creating some of the state’s most innovative public financing agencies.

Our lawyers have also handled tax-exempt financing for more than half of the state’s 85 school districts, as well as for many municipalities, counties and special purpose districts. McNair has worked with issuers from Colorado to Florida in student loan finance that blends tax-exempt and taxable issues, and also advises for-profit issuers. And our underwriter clients include many of the major New York investment banks.

You receive guidance from a core group of 10 public finance lawyers who are supported by McNair’s full resources in tax, economic development, banking, real estate, administrative and corporate law, and other related areas of practice. Our team members serve not only as bond and underwriter’s counsel, but also as issuer’s counsel, trustee’s counsel and letter of credit counsel on:

• Airport revenue bonds
• Bond anticipation notes
• Electric revenue bonds
• Fee in lieu of taxes arrangements
• General obligation bonds
• Hospital facilities bonds
• Housing bonds
• Industrial development bonds
• Exempt facility revenue bonds
• Mortgage revenue bonds
• Student loan revenue bonds
• Installment purchase revenue bonds
• Lease purchase financing
• Parking facility revenue bonds
• Pollution control facilities bonds
• Stadium and dormitory bonds
• Tax anticipation notes
• Tax increment financing
• Water and sewer bonds

Providing Comprehensive Service

You get a complete service package when you engage us as bond counsel. As lead counsel on any issue, you can rely on us to draft all documents relating to authorization, sale and delivery. We prepare a definitive legal opinion on enforceability under applicable state and federal laws, including state “blue sky” laws and federal securities regulations. Our lawyers structure the bond for maximum capital appreciation, particularly when revenue generation capability takes time to develop, while still maintaining full tax exemption. We offer full assistance when a bond issue requires voter approval, including preparation of the necessary documents and advice on election and bond procedures.

How we Get Things Done
In a true firmwide effort, McNair created a joint action agency formed by 10 municipalities in northwest South Carolina to provide wholesale electric service to its members primarily through 25% ownership of a nuclear power plant. To create the agency we had to draft and secure approval of a special state law, then twice successfully defend the law before the South Carolina Supreme Court.

We prevailed for our client, and served as counsel on its initial $730 million public finance issue that was the largest in state history at that time. Since then, as outside general counsel, we have continued to assist the agency with several billion dollars in public financings – and have also served as counsel on general obligation bonds and water and sewer bonds for eight of the ten participating municipalities.

Advising Exempt Organizations

Public and private foundations, charitable organizations, hospitals and educational institutions, seek our help to secure and maintain their tax-exempt status under the Internal Revenue Code. Because many tax-exempt organizations have operations that generate taxable revenue, an important part of our counsel involves the tax treatment of unrelated business income.

By the same token, exempt organizations get the help they need on the tax treatment of divesting for-profit subsidiaries and divisions, and on mergers or joint ventures with for-profit organizations. Other services to tax-exempt clients include:

• Representation before the IRS in letters of determination and private letter rulings with respect to tax-exempt status of bonds
• Responses to federal and state audits and inquiries
• Creation of 501(c)(3) organizations and maintenance of tax-exempt status
• Bond counsel for issuing of tax-exempt securities.

How we Get Things Done
We have helped several South Carolina universities form 501(c)3 entities as tax-efficient vehicles to expand their student housing facilities. Our lawyers advised one such client on issuing tax-exempt bonds used to acquire more than 20 facilities that ultimately housed nearly 1,000 students. Currently we are helping the university sell these facilities to another exempt organization, structuring the proceeds in a way that both pays off the bonds and makes additional funds available for student scholarships.

Creating Innovative Financing Structures

McNair’s knowledge of how government works means we have the creative resources to create public financing structures that are effective – and that few, if any other law firms can assemble. We understand how state government works at the highest executive and legislative levels, and our professional credibility means we are often successful at partnering with decision-makers to craft innovative solutions that reshape the public finance landscape.

We can resolve even the most complex public financing challenges, and we are equally effective at structuring administrative law and handling the issuances of the new financing agencies. Our goal is to ensure that any financing agency adds value for government and has full market acceptance.

How we Get Things Done
When the state of South Carolina experienced difficulties securing sufficient financing for major road and highway construction and repair, McNair took the lead in helping to create the South Carolina Transportation Infrastructure Bank. The Bank has since issued over $3 billion in bonds and state-backed loans to facilitate faster and more comprehensive road infrastructure work.

Facilitating Local Government Finance

In counseling the governing bodies of more than half of South Carolina’s counties, and many of the state’s municipalities, McNair has served as bond counsel on a wide range of economic development, water, sewer and general obligation financings. We have also advised on financing for all four of the state’s major airports.

How we Get Things Done
We have been particularly effective at developing incentive vehicles that combine financing from multiple public and private sources. In one major package we integrated municipal, county and private financing to facilitate the construction of a downtown convention center / hotel development.

Other examples include an incentive package that we developed to help two municipalities create a development corridor between them, a public-private partnership formed to create incentives for redeveloping a blighted urban area, and innovative multi-entity incentives for the development of a public-private recreation complex.

Counseling on Student Loan and Education Finance

Student loan finance is an area of particular strength for McNair. We have represented state financing agencies in Colorado, Florida, Georgia, Kentucky and Tennessee as well as in South and North Carolina, and regularly advise on 103 and 150(d) programs. We regularly handle student loan transactions marketed to investors (often large commercial banks) located in Britain, Ireland and elsewhere in Europe, including assisting listing transactions on the Irish financial exchange.

Pooling is one of the most innovative school financing techniques available, and we regularly act as tax counsel in bond transactions that pool the financings of school districts and other 501(c)(3) exempt organizations.

How we Get Things Done
We played the key role in the creation of the South Carolina Association of Governmental Organizations (SCAGO) as a non-profit 501(c)(3) corporation. SCAGO promotes financing and investment opportunities to benefit South Carolina school districts, counties and municipalities. Through SCAGO's financing programs, almost $1.5 billion in tax exempt debt has been issued on behalf of state school districts.