Renewable Energy capital markets group experiences growth in advisory services

Friday, Dec 07, 2012

Reznick Capital Markets Securities (RCMS), a subsidiary of leading accounting, tax and advisory firm CohnReznick LLP, announced the completion of advisory services for three major northeast solar projects. The activity reinforces the group’s growing profile in renewable energy structuring and negotiations as well as its expertise as tax equity advisors.

“Our depth in Renewable Energy allowed us to quickly assess the best approach that often lowers transaction costs and legal fees for our clients”

The renewable energy projects comprised of a 5.702 MW project in Massachusetts where three municipalities jointly purchased the energy from a ground-mount installation, a 8.146 MW net metering project at the New Jersey properties of a leading national food distributor, and a 12.820 MW portfolio of solar distributed generation projects with the Long Island Power Authority (LIPA). RCMS worked with independent asset management firm Capital Dynamics, as well as Renewable Energy financing leader US Bank, to advise on how to best structure tax equity financing for these projects. The result was a lease pass through structure that allowed Capital Dynamics to take advantage of the most economic financing structure for this portfolio while also presenting an acceptable risk and return profile for US Bank.

The deal also highlights Reznick Capital Markets Securities experience of working with infrastructure funds entering the Renewable Energy space and looking to understand the tax equity market; strongly positioning them to work on similar projects in the future.

“Our depth in Renewable Energy allowed us to quickly assess the best approach that often lowers transaction costs and legal fees for our clients,” said RCMS Vice President Conor McKenna, adding “No two deals are ever the same. The individual needs of developers and investors, overlaid with local requirements, state incentives and federal tax issues mean that the deal structures need to be carefully crafted.”

Two of the three projects had Solar Renewable Energy Credits and as a result, the deal was structured to take into account both the power and SREC revenue streams. In addition, the portfolio took advantage of the US Treasury Department 1603 Cash Grant Program.

Due to the many challenges associated with Renewable Energy projects, when it comes to structure, valuation and finding tax equity partners, establishing the best structure for all parties and getting it done efficiently are critical steps to a successful close - especially in a difficult investing environment. CohnReznick’s track record and experience in this space facilitated the success of this transaction and helped further Capital Dynamics’ investment objectives.

Source: Business Wire