Transactions and Case Studies:  $523,675,000 and $446,760,000 The Black Belt Energy Gas District

Gas Supply Revenue Bonds
SERIES 2017A and 2016A

The MCM team has been a leading innovator in the area of prepaid natural gas supply and finance since completing the first ever such transaction in 1994. Those innovations have included both (i) fixed gas price and (ii) fixed discount to index gas price prepays using both fixed rate long-term bonds and variable rate long-term bonds swapped to fixed interest rates. More recently market conditions have also driven the development of variable savings to index prepays using shorter term “put bonds”. The Black Belt Energy Gas District has completed two such transaction where a 30 year gas supply was financed using bonds subject to mandatory puts in five years. The bonds will be remarketed or refunded at or prior to the mandatory put date and new interest rates established. The discount to index payable by the municipal gas purchasers under their supply agreements with Black Belt Energy will adjust accordingly, subject to a the election of the gas purchasers to remarket the gas if a stated minimum discount to index is not achieved. MCM served Black Belt Energy as financial advisor relative to the Bonds and qualified independent representative relative to the commodity swap. MCM also confirmed the accuracy of the Issuer’s probability analysis relating to its reasonable expectation that the transaction will run to term.

The Black Belt Energy Gas District, Alabama (the "Issuer") issued $523,675,000 and $446,760,000 of its Gas Supply Revenue Bonds, Series 2016A and 2017A (the "Bonds") pursuant to Trust Indentures, (the "Indentures"), by and between the Issuer and The Bank of New York Mellon Trust Company, N.A., as trustee (the "Trustee").

Proceeds of the Bonds were used to prepay the costs of the acquisition of fixed quantities of natural gas to be delivered over 30 years (the "Gas Supply") under Prepaid Natural Gas Purchase and Sale Agreements (the "Prepaid Gas Agreements"), by and between Royal Bank of Canada (the "Gas Supplier") and the Issuer. In connection with its acquisition of the Gas Supplies, the Issuer entered into Natural Gas Supply Agreements with the Gas Purchasers including, Clarke-Mobile Counties Gas District, the Municipal Gas Authority of Georgia, The Tennessee Energy Acquisition Corporation, The Southeast Alabama Gas District and Patriots Energy Group (the "2016A Gas Purchasers"), and Clarke-Mobile Counties Gas District, The Southeast Alabama Gas District and The Marshall County Gas District (the " 2017A Gas Purchasers"), respectively (individually, a "Supply Agreement" and collectively, the "Supply Agreements"), providing for the sale of the Gas Supplies by the Issuer to the Gas Purchasers. The gas acquired by the Gas Purchasers will be sold to retail customers located in the Gas Purchasers' respective service areas or pursuant to wholesale arrangements with other Public Agencies. Pursuant to the Prepaid Gas Agreements, the Gas Supplier is obligated to deliver specified daily quantities of gas to the Issuer, make certain payments for any gas not delivered, remarket gas not taken by the Gas Purchasers and pay certain liquidated damages upon any early termination of either Prepaid Gas Agreement in whole or in part. Any such payment will be applied to the mandatory redemption of the respective Bonds in whole or in part, as applicable.

The Bonds were issued in a Long-Term Interest Rate Period commencing on the Issue Date of the respective Bonds and ending approximately five (5) years after the Issue Date (the “Mandatory Purchase Date”), during which period the Bonds shall bear interest at fixed rates per annum. The Bonds are required to be tendered for purchase on the Mandatory Purchase Date.

Liquidity Facilities: In order to provide for the purchase of each series of Bonds on their Mandatory Purchase Dates which are not remarketed, the Issuer entered into a Settlement Agreements (the "Liquidity Facilities"), with Royal Bank of Canada (the "Liquidity Facility Provider"). The Liquidity Facilities expire on the Business Day following the respective Mandatory Purchase Date.

Failed Remarketing: Under the terms of each Indenture, a "Failed Remarketing" will occur in the event of a failure, on the respective Mandatory Purchase Date, to either pay the Purchase Price of the applicable series of Bonds or redeem the Bonds on such date.

Optional Redemption: For each series of Bonds, the Bonds maturing on and after the Mandatory Purchase Date are subject to optional redemption in whole or in part on the first Business Day of the third calendar month prior to the Mandatory Purchase Date, at a Redemption Price equal to the Amortized Value of the Bonds called for redemption, plus accrued interest to the redemption date.

Repricing Agreements: The Repricing Agreements establish the methodology for determining the Available Discount for each Delivery Month of each Reset Period following the Initial Reset Periods. Each Reset Period commences on the day following the last day of the Initial Reset Period or prior Reset Period, as the case may be. The duration of each Reset Period will be five (5) years or such shorter or longer period as may be determined by Royal Bank, in consultation with the Issuer, in connection with calculation of the discount to the monthly index price. The price payable by the Gas Purchasers for the Gas Supply includes a discount to the monthly index price set forth in the applicable Supply Agreement, which discount has been established for the Initial Reset Period and will be repriced for each subsequent Reset Period under the terms and conditions set forth in the respective Repricing Agreement, including the interest rate established in any remarketing or refunding of the Bonds. Under the terms of the Supply Agreements, if the discount so established for any subsequent Reset Period is less than the Minimum Discount, each Gas Purchaser may elect to have all or a portion of its Gas Supply remarketed for the Remaining Term.