Prepay Trustee Bank
Replacement
Rusty Mills
March 4, 2026
Role of Trustee/Custodian in the Prepay Transactions
2 Ava has entered five energy prepayments in conjunction with CCCFA, including two transactions that closed in 2025.
▪ All five have Bank of New York Mellon (BNY) as Trustee. ▪ Started using BNY with first prepay in 2021 with SVCE – through Morgan Stanley Trustee and Custodial Services within the Prepay Structure ▪ Trustee acts as a third-party administrator to maintain custody of the dedicated accounts for each transaction and make payments to bondholders and various counterparties on a timely basis. ▪ Ava interfaces with the Trustee and Custodian each month to deliver invoices, review documentation, process monthly payments and withdrawals, and review account activity.
More efficient to use Single Custodial Bank
▪ In general, using a single Trustee / Custodian to serve all transactions is more operationally-efficient for staff than using multiple institutions and/or bifurcating the Trustee / Custodian roles within a single transaction.
Ava Seeking Approval to Replace Trustee/Custodian
3 Ava staff has determined it beneficial to replace its legacy Trustee and Custodian, BNY from its role for all five prepays for operational and financial reasons and utilize US Bank. ▪ US Bank offers a more robust web-based platform for downloading key transaction information not previously available with the legacy Trustee / Custodian.
▪ Staff concerns with performance and latency of responsiveness with the legacy Trustee / Custodian. ▪ Ava expects to save up to $64,900 per year in trustee and custodial fees (or roughly $13,000 per transaction). • Ava will incur bond counsel expenses in drafting legal notices and amendments to transition to the successor Trustee and Custodian – less than $50k to be split with SVCE US Bank - the leading municipal trustee and custodial service providers in the United States • Deep experience in energy prepayment transactions; serves as trustee for almost all other CCA transactions. • At year-end 2025, the U.S. Bank Global Trust group had over $9.2 trillion assets under management across 194,000 transactions.
• Has the largest market share (45%) for trust services for U.S. municipal issuances.
Next Steps
4 Bond Counsel has recommended that Staff seek an approving Resolution from our Board and from CCCFA’s Board
▪ Staff Report and Resolution will be provided to the Board ahead of March meeting • Will be on Consent due to its administrative nature
▪ SVCE concurrently seeking approval from its Board
▪ With Ava approval, CCCFA Board will have it agendized at their March 26th meeting for approval ▪ Notices will be filed to the investment community ahead of the substitution on May 1st