Wells Fargo resigned Friday as lead underwriter for a potential $500 million bond sale for the Oklahoma Turnpike Authority in the wake of its placement on the state treasurer's list of companies banned from government contracts.
Wendy Smith, OTA's finance and revenue director, said in an email Wells Fargo's resignation came even though the bank disagrees with the Treasurer's decision.
The Authority has selected RBC Capital Markets as its replacement as lead underwriter on the issue, she added.
The 13 financial institutions on the list released Wednesday were determined to be boycotting the oil and gas industry and are thereby ineligible for state and local government business under a 2022 law. Wells Fargo, which was picked last summer to head the OTA bond deal, JPMorgan Chase and Bank of America were the only municipal bond investment banks to be tagged as boycotters.
The Energy Discrimination Elimination Act of 2022 took effect Nov. 1, months after OTA assembled the underwriting team for the second senior lien revenue bond issue, which would begin financing for a $5 billion, 15-year turnpike extension project known as ACCESS (Advancing and Connecting Communities and Economies Safely Statewide) Oklahoma. Stifel, Nicolaus & Company; Morgan Stanley; BOK Financial; and Raymond James were selected as co-managers.
Litigation brought by homeowners in the path of the extensions delayed the bond sale, which remains before the Oklahoma Supreme Court, which has been asked by OTA to validate the debt. If the bonds are validated, OTA would have to return to the state's Council of Bond Oversight because that body's conditional approval of the debt expired in February.
Last month, OTA halted construction work related to the ACCESS project over concerns about its access to the municipal bond market.
In March, Oklahoma Attorney General Gentner Drummond ordered an audit of the OTA, citing concerns he heard from lawmakers, state employees, and others about "improper transfers between the OTA and the Department of Transportation; improper contracting and purchasing practices; and inadequate internal financial controls."
The Republican-controlled House and Senate have passed slightly different versions of a bill allowing legislative leaders to appoint four of the six OTA board members, shortening their terms to six years from eight, and prohibiting them from voting on items in which they have a direct financial interest.
The Wyoming-based digital asset bank filed paperwork to challenge last month's district court ruling, which affirmed the Federal Reserve's view about its discretion over master account applications.
The former head of the Consumer Financial Protection Bureau resigned Friday after the troubled rollout of the Free Application for Federal Student Aid led some House Republicans to call for his resignation.
The San Antonio-based bank said that loan growth, fueled in part by its expansion in key Texas markets, may compensate for pressure on deposits. It slashed the number of rate cuts it expects this year from five to two.
Mississippi's Renasant names its next CEO; environmental fintech Aspiration Partners spins out its consumer brand; the OCC adds five weeks to comment period for Capital One-Discover merger; and more in the weekly banking news roundup.
The Wisconsin banking company forecasted loan growth of 4% to 6% for the full year, driven by an expansion into new commercial and consumer credit lines as well as enduring economic strength in the Midwest.
In the inaugural iteration of American Banker's news quiz, test your knowledge on top articles covering the legal battles of the Consumer Financial Protection Bureau, new technology testing at JPMorgan Chase, earnings season and more.