In January 2009, Arkansas was struck by an ice storm which caused widespread damage to infrastructure and power outages throughout Entergy Arkansas Inc.'s service territory. In response to the damage to the utility infrastructure the Arkansas legislature passed the Arkansas Electric Utility Storm Recovery Securitization Act authorizing the Arkansas Public Service Commission to issue financing orders allowing for the securitization of storm recovery costs.
Entergy Arkansas Restoration Funding, LLC is issuing $124 million of senior secured storm recovery bonds, with Entergy Arkansas as the seller, initial servicer and sponsor. The bonds are secured by storm recovery property, which includes the right to a special, irrevocable nonbypassable charge, known as a storm recovery charge, paid by all retail electric customers in the certificated service territory. Credit enhancement for the bonds will be provided by such statutory true-up mechanism as well as by general, excess funds and capital subaccounts held under the indenture.
Morgan Stanley & Co. has agreed to purchase all of the bonds as underwriter. The prospectus supplement was filed on Form 424B5 filed 8/13/10 (file no. 333-168010). The underlying registration on Form S-3 includes as exhibits the forms of indenture, storm recovery property servicing agreement, storm recovery property purchase and sale agreement, and the Financing Order issued by the Arkansas PSC.
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