News & Insights

Public Finance Deal of the Year

Innovative Michigan Transaction Snags Public Finance Honors

December 27, 2012

DETROIT—In a black-tie event at the Waldorf Astoria in New York City on Wednesday, December 5, 2012, the Michigan Finance Authority received The Bond Buyer’s 2012 Deal of the Year award. Dykema is honored to have been a part of the financing team for such an important transaction.

The transaction, which involved a $3.3 billion bridge financing that closed in December 2011, followed by a $2.9 billion long term financing that closed this past summer, enabled the State of Michigan to repay its $3.2 billion Unemployment Trust Fund deficit to the U.S. Treasury. Dykema served as lead counsel to the syndicate of 14 investment banking firms that were underwriters for this transaction.

The $3.3 billion bridge financing enabled the state to save millions of dollars in interest costs associated with a loan from the federal government for unemployment insurance benefits. The innovative financing mechanism not only allowed Michigan to immediately restore solvency to its Unemployment Trust Fund, but provided a long term low cost of capital, enabling the State to reduce current and future burdens on Michigan employers, including elimination of the Michigan solvency tax on employers.

In presenting the Deal of the Year award, Gavin Murphy, editor in chief of The Bond Buyer, stated, “This was a transaction that was big, precedent setting and AAA all around. It provided a template for subsequent deals, a low cost of capital and benefits for both the public and private sectors.”  Jim Kiefer and Ann Fillingham, Lansing, Michigan-based members in Dykema’s Business Services Department and Public Finance practice group, led Dykema’s efforts on this award-winning transaction.