Transactions and Case Studies:  $14,225,000 Certificates of Participation

(OAKLAND UNIVERSITY CENTRAL HEATING PLANT PROJECT)
SERIES 2014
Evidencing Proportionate Interests of the Owners
Thereof in Base Rentals to be Paid by
OAKLAND UNIVERSITY
Pursuant to a Lease Agreement

The University is a constitutional body corporate of the State of Michigan. The University currently has approximately 20,500 students and approximately 5,000 full and part time faculty and staff. The University’s main campus is located in Rochester, Michigan and includes approximately 1500 acres of land.

OpTerra Energy Services, Inc. is a portfolio company of Oaktree Power Opportunities Fund III, L.P., which is managed by the GFI Energy Group of Oaktree Capital Management, an investment firm with over $90 billion in assets under management. Prior to its acquisition by Oaktree in September 2014, OpTerra Energy Services comprised the non-federal energy services operations of Chevron Energy Solutions.

The Project consists of the construction and installation of a combined heat and power co-generation system at the existing central heating plant located on the University’s campus. Upon its completion, the Project is expected to provide a majority of the electricity and hot water requirements of the University campus.

The Project will be developed, constructed, installed and commissioned by OpTerra Energy Services, Inc., a Delaware corporation (the “Energy Services Contractor” or the “Contractor”), pursuant to an Energy Services Contract, dated as of December 23, 2014 (the “Energy Services Contract”), between the Energy Services Contractor and the University.

The Energy Services Contract requires the Contractor to (a) achieve substantial completion of the Project within 18 months of its receipt of a notice to proceed from the University, and (b) to pay liquidated damages to the University for its failure to achieve substantial completion by this date. Upon the substantial completion of the Project pursuant to the Energy Services Contract, title to the Project will be vested in the trustee bank, UMB Bank n.a., acting in its capacity as Lessor, which will lease the Project to the University pursuant to the Lease.

Upon final completion of the Project, the Contractor has guaranteed to the University that the Project will achieve certain energy cost savings as set forth in, and subject to the terms and provisions of, the Energy Services Contract.

Pursuant to the Lease, the Lessor will lease the Project to the University, which will operate, maintain and insure the Project upon its Substantial Completion. The term of the Lease will commence on the earlier of (i) the Substantial Completion of the Project as determined pursuant to the Energy Services Contract and (ii) June 15, 2016 and expire on June 15, 2031, subject to earlier termination in certain events as described herein.

The University agrees in the Lease to make Lease Payments, consisting of Base Rentals (consisting of a Principal Component and an Interest Component) and Additional Rentals directly to the Trustee. Base Rentals are payable by the University in amounts that equal the principal and interest distributions on the Series 2014 Certificates, and Additional Rentals are paid to cover certain administrative costs and extraordinary expenses.

The obligation of the University to make Lease Payments is not subject to annual appropriation, setoff, counterclaim, or abatement for any reason, including but not limited to failure of the Energy Services Contractor to achieve substantial completion of the Project by the date required in the Energy Services Contract, failure of the Contractor to achieve final completion of the Project prior to the commencement of the Lease, failure of the Project to provide the guaranteed energy savings specified in the Energy Services Contract, the performance by the Contractor under the Energy Services Contract, or the loss of use of the Project by the University for any reason including damage or destruction. Recourse for such failures by the University is directly to the Energy Services Contractor and its payment and performance bond.

The Series 2014 Certificates will be executed by the Trustee and evidence proportionate interests in the Base Rentals payable by the University pursuant to the Lease. The Series 2014 Certificates are not obligations of the University, and the obligations of the University are limited to those set forth in the Lease. The obligations of the University under the Lease are payable from general funds of the University and are not secured by a pledge of or a lien on any revenues, funds or real or personal property of the University.

The Series 2014 Certificates have an average life of 11.89 years with a final maturity of July 1, 2031, were rated ‘A1’ by Moody’s and were sold at an average yield of 3.51%.

In addition the MCM team, while engaged at another firm, structured and financed the first ever securitization of federal Energy Service Contract (ESC) Payments for development of a Central Utility Plant (steam, chilled water, conditioned power and backup power) and Utilidor pursuant to an Enhanced Use Lease with the U.S. Army on the campus of the Interagency Biodefense Campus at Ft. Detrick, MD. The Series 2006 and 2009 ‘Aaa’/’AAA’ insured taxable bonds totaling $151,781,000 were offered under SEC Rule 144A. Likewise, they banked the tax-exempt $41,250,000 University of Colorado Board of Regents Central Utility and Cogeneration Plant and arranged for a 10 year gas supply contract with KN Energy.