The city of Missoula, Montana waged a six-year legal battle to wrest control of its water system from a
private company.

The water system in the town of 70,000 was privately-owned by Mountain Water – a company that
refused to make needed repairs to the system or sell it to the city. The city chose to pursue
condemnation in the courts.

When city leaders set off on the quixotic path to gain control of the city’s water system, there were no
guarantees a judge would rule in their favor. Obtaining traditional financing with no disclosure from
Mountain Water -- and water assets nearly beyond repair -- was unattainable given the risks. The city
also had to provide payment before the court could rule it owned the water system.

The solution: the direct sale to Barclays of nearly $140 million in A-rated bond anticipation notes. The
financing plan uniquely provided the necessary mechanics to allow the city to purchase the water
system. Prior to the acquisition, water bills were 17% higher than elsewhere in the state, but dropped to
49% below average after the deal.

VOICEOVER: The city of Missoula, Montana waged a six-year legal battle to wrest control of its water system from a private company. The water system in the town of 70,000 was privately-owned by Mountain Water, a company that refused to make needed repairs to the system or sell it to the city. The city chose to pursue condemnation in the courts.

When city leaders set off on the quixotic path to gain control of the city’s water system, there were no guarantees a judge would rule in their favor. Obtaining traditional financing with no disclosure from Mountain Water and water assets nearly beyond repair was unattainable given the risks.

The city also had to provide payment before the court could rule it owned the water system. The solution: the direct sale to Barclays of nearly $140 million in A-rated bond anticipation notes. The financing plan uniquely provided the necessary mechanics to allow the city to purchase the water system. Prior to the acquisition, water bills were 17% higher than elsewhere in the state but dropped to 49% below average after the deal.