DOR, Investment Bankers Meet on Gas Pipleline

FOR IMMEDIATE RELEASE: May 25, 2004 No. 04-140

Revenue Officials Meet with Investment Bankers on Gas Pipeline Financing

(Juneau) - Throughout last week the Department of Revenue held opening discussions with investment banking firms regarding the Alaska gas pipeline project. The gas pipeline will lend further economic stability and growth to the Alaskan economy.

In New York City, Washington, D.C. and Anchorage, Commissioner Bill Corbus, Deputy Commissioner Steve Porter and other department personnel met with several financial institutions including Merrill Lynch, Goldman Sachs, UBS Financial Services, J P Morgan, CitiGroup, and First Southwest. The New York City meetings were facilitated by Government Finance Associates, the long-term financial advisor to the state, with Steve Porter representing the state. Discussions focused on the future Alaska North Slope gas pipeline project financing. There was substantial interest on the part of the financial institutions, and follow-up meetings have been scheduled. Talks with other investment banking firms will take place throughout the summer.

Governor Frank H. Murkowski said, "It is important to examine all options available to the state, and begin to define risks, as we look to what commitments must eventually be made in bringing Alaska's gas to market. The state has a long position in petroleum resources, including natural gas, and much of the U.S. is very short; how we capitalize the transportation systems will impact Alaskans and the U.S. energy future for the next 50 years."

These initial meetings focused on possible financing options available to the state, and defining the financial and operational risks of several possible scenarios. The size and complexity of the project may require multiple firms to participate in any financing package. Possible nominal issuers, feasibility determination, interest rate sensitivity and other financial scoping considerations were discussed. The eventual financing could include fixed and variable rate, and taxable and tax-exempt series. Typically, a financing of this size would have a lead senior managing underwriter, one or more co-senior managers, a number of co-managing underwriters, and a broader list of syndicate participants.

# # #