As reported in

THE B OND BUYER

April 1, 2014

Stradling Hits 35; Tops in Calif. Bond Counsel Deals

LOS ANGELES Stradling Yocca Carlson & Rauth marked its 35th year in public finance with another milestone, by serving as bond counsel on more California deals than any other firm. In 2013, the firm completed 182 deals in California, up from 141 in 2012, according to Thomson Reuters data. Orrick, Herrington & Sutcliffe, which had held the distinction since 1991, came in second with 152 deals. Orrick kept the top spot for volume, credited with $23.7 billion of California transactions. Stradling came in second with $9.8 billion. "It was a strong year for the market generally, but we enjoyed a tremendous amount of success and I think it's because we were strong in multiple areas across the market," said Robert Whalen, Shareholder and chair of the firm's public finance group. Stradling also ranked first among all disclosure counsel in California based on number of deals, and finished second among all underwriter's counsel based on number of deals. Whalen said Stradling's K-14 practice, covering public schools and community colleges, was a major factor behind its strong 2013. The practice is led by David Casnocha, a managing partner in the firm's San Francisco office. "Assisting our education clients in obtaining needed funding, in an era of tight budget constraints and tremendous need for educational facilities, has been an important and rewarding part of our practice," said Casnocha. The area will be a continued focus and growth area, according to Whalen. This year is a bond-election year for school districts, which will generate debt in the tail end of this year into 2015. The bond counsel firm also saw strength in other practice areas, including its work for the state of California in land-secured financings, which were boosted by improved economic conditions in the housing market sector and in redevelopment refundings. The process of dissolving the state's redevelopment agencies has progressed to a point where refundings of previous deals for the agencies became possible, Whalen said. Stradling was able to boost its deal volume and amount during another year when supply declined, says Robert Whalen. Following 2011 legislation, redevelopment agencies in California were shut down and their successor agencies have had to undergo a wind-down process to manage redevelopment projects underway and account for the agencies' outstanding debt. Stradling was able to increase its deal volume and amount during another year when supply continued to decline in the overall muni market. Total volume dropped 12.5% to $334.6 billion in 2013, largely driven by a 29.1% drop in refundings. Among cities and counties in California, the appetite for new general fund debt is still somewhat muted, but special revenue debt in areas like water, sewer and convention centers is still moving ahead, according to Whalen. I'd say there's still a caution on the part of the general fund issuers in taking on a lot of new debt," he said. "There's a great deal of concern about the increasing cost of pensions as a percentage of budgets, so they're having to balance that with capital needs. Looking ahead, the firm said it expects another successful year, with continued strength in the Golden State, as well as growth from its recently opened Nevada office. Stradling Yocca Carlson & Rauth, founded in Newport Beach in 1975, has more than 120 attorneys in seven offices across California and Nevada.