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NTTA Bond Offering Sells Out with Strong System Credit Ratings  The NTTA financial team successfully executed the sale of $268,625,000 of System Revenue Refunding bonds on Nov. 15 after receiving strong credit reports for the NTTA System from both Moody’s Investors Service and Standard and Poor’s.
“The outcome shows that the NTTA is still well respected in the market, despite the size of the debt portfolio,” said NTTA Chief Financial Officer Janice Davis. She also praised the work of the underwriting team led by Seibert Brandford Shank & Co. for the tremendous job it did in attracting new investors to the credit.
Moody's Investors Service assigned an A2 rating to the $296.4 million NTTA System First Tier Revenue Refunding Bonds, Series 2011B. Moody’s rating outlook changed from negative to stable. Standard & Poor's Ratings Services assigned its A- long-term rating to the NTTA’s $266.25 million series 2011B first-tier revenue refunding bonds. At the same time, Standard & Poor's affirmed its A- long-term and underlying ratings (SPUR) on NTTA's $6.1 billion first-tier system revenue bonds and its BBB+ long-term rating on the authority's $1.1 billion second-tier revenue bonds. Finally, Standard & Poor's affirmed its 'AAA/A-1+' rating on NTTA's series 2009D variable-rate first-tier system revenue refunding bonds. The outlook, where applicable, is stable.
“We are pleased with the NTTA System ratings and the movement to a stable outlook for the NTTA System. These ratings demonstrate the financial strengths of the System,” said NTTA Chairman of the Board Kenneth Barr. “As an organization, we are delivering valuable, quality transportation solutions to this region and offering viable travel choices to customers throughout North Texas.”
The proceeds of the sale will be used to refund the $175 million Subseries 2008E-2 Put bonds that have a mandatory Put date of Jan. 1, 2012, all outstanding 1997A bonds and $51.6 million of the outstanding 1998 bonds. The 1997A and 1998 bonds were refunded for a total savings of $10.1 million and Present Value savings of $7.4 million or 7.81 percent of refunded bonds. The issue was significantly oversubscribed and surpassed interest rate expectations.
After issuing the Bond Anticipation Notes (BANs) to fund the Sam Rayburn Tollway in 2007, the turmoil in the long-term municipal bond markets made it extremely difficult to refund them. The NTTA elected to utilize “Put bonds” as a means to reduce the overall rate on the debt used to refinance the BANs. During 2008, approximately $1.3 billion in Put bonds were issued. At the respective mandatory put dates, these bonds needed to be refinanced into either long-term fixed rate bonds or into some other mode or the rate would escalate to 12 percent.
The 2010 and 2011 Put bonds were refunded with fixed rate tax exempt debt. The NTTA financial team continuously monitors the debt markets for opportunities to refund existing obligations at lower rates.
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