Ariz. Rev. Stat. § 40-607 – Transition property; security interest; lien; priority

A. This section applies to all purported transfers of, grants of liens on, or security interests in transition property. Except as otherwise provided in this section, the creation, perfection and enforcement of a security interest in transition property that is pledged to secure the payment of the ongoing financing costs are governed by this section.
B. The description of or reference to transition property in a transfer or security agreement and a financing statement is sufficient if and only if the description or reference refers to this chapter and the financing order describing the transition property. A security interest in transition property is created, valid, binding and enforceable at the latest of any of the following:
1. 1. When the transition bonds are issued by the qualified special purpose entity.
2. 2. When a security agreement is executed and delivered by the qualified special purpose entity.
3. 3. When value is received by the qualified special purpose entity for the transition bonds.
C. The security interest in transition property is a statutory lien in favor of the applicable financing party that attaches automatically when the transition bond is issued and value for the transition bonds is received. The security interest attaches without any physical delivery of collateral or other act, and the security interest is valid, binding and perfected against all parties having claims of any kind against the person granting the security interest, regardless of whether the parties have notice of the lien, on the filing of a financing statement with the secretary of state. The secretary of state shall maintain the financing statement in the same manner and in the same recordkeeping system maintained for financing statements that are filed pursuant to title 47, chapter 9, article 5. Financing statements that are filed pursuant to this section are effective without the need to file a continuation statement until a termination statement is filed.
D. A transfer of an interest, including a grant of a lien or security interest, in transition property is perfected against all third persons. A security interest in transition property is a continuously perfected security interest and has priority over any other lien that may subsequently attach to the transition property unless the holder of the security interest has agreed in writing otherwise.
E. The priority of a security interest in transition property is not affected by the commingling of financing revenues with other funds. Any pledgee or secured party has a perfected security interest in the amount of all financing revenues that are deposited in any account of the servicer in which financing revenues have been commingled with other funds, and any other security interest that may apply to such financing revenues is terminated when those funds are transferred to a segregated account for a financing party or assignee of a financing party.
F. The true-up mechanism does not affect the validity, perfection or priority of a security interest in or transfer of transition property.
G. The validity, perfection or priority of a lien and security interest under this chapter is not impaired by any later modification of a financing order or changes in a customer's financing charges.