Direct Purchases of State or Local Obligations by Commercial Banks and Other Financial Institutions

Chapman Partner Juliet Huang served as the primary drafting counsel for a paper published by the National Association of Bond Lawyers (NABL), entitled “Direct Purchases of State or Local Obligations by Commercial Banks and Other Financial Institutions.” The paper identifies various issues that arise in connection with the structuring and negotiation of direct purchase transactions, and explores some of the more commonly encountered provisions present in direct purchase documents. The paper includes four parts that:

1. Describes common structures and terms and examines basic documentation and interest rate mechanics, as well as maturity, prepayment, and amortization provisions.
2. Explores some of the representations, warranties, and covenants frequently negotiated in direct purchase agreements.
3. Examines provisions that are often requested by banks in a direct purchase transaction and that are typically not included in public offerings.
4. Describes events of default and remedy features that are often considered in direct purchase transactions. 

For more information, visit NABL.org.

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