Bond Market Shows Great Enthusiasm for NTTA OfferingRates Allow Increased Financial Flexibility for Authority
The NTTA financial team successfully executed the sale in April of more than $1 billion of bonds and notes for the acquisition, construction and operation of the President George Bush Turnpike Western Extension.
The PGBT-WE bond sale has been a collaborative approach to financing this project among the NTTA, the Texas Department of Transportation and the U.S. Department of Transportation. Financial support comes in the form of a standby loan from the TxDOT and a Transportation Infrastructure Finance and Innovation Act loan from the Federal Highway Administration supported the successful sale.
The PGBT-WE will be the first road in NTTA’s Special Project System. Southwest Parkway / Chisholm Trail may be added to the new Special Project System later this year. The NTTA System is providing a $400 million contribution to be used for both projects. The favorable financing of PGBT-WE allows for a larger portion of the $400 million contribution to be used for the Southwest Parkway / Chisholm Trail project. NTTA will make a final decision on financing the SWP/ CT project later this year.
“We’re pleased that the market showed such confidence in the NTTA as a financially sound and vibrant organization,” said NTTA Chairman Victor Vandergriff.
The issues were heavily oversubscribed and surpassed interest rate expectations. The sale was comprised of:
$488 million current interest bonds
$55 million capital appreciation bonds (CABs)
$130 million convertible CABs
$418 million bond anticipation notes (BANs) in anticipation of the TIFIA loan
The NTTA signed an agreement under the TIFIA and with the USDOT to secure a loan for the PGBT-WE project. The NTTA recognizes and deeply appreciates the assistance of U.S. Senator Kay Bailey Hutchison and U.S. Representative Eddie Bernice Johnson in obtaining this financing.
The Special Project System Series 2011 Bonds and the TIFIA loan will be secured by the tolls on PGBT-WE and will be further supported by the Toll Equity Loan from TxDOT. The SPS Series 2011 Bonds are the inaugural issuance of the new stand-alone credit of the NTTA.
The Series 2011 BANs are being issued in anticipation of drawing upon the TIFIA loan from the USDOT. Neither the SPS Series 2011 Bonds nor the Series 2011 BANs are obligations of the NTTA System or the State of Texas.
The NTTA received a AA rating from Standard & Poors and a AA- rating from Fitch Rating Services for the bonds. The underwriting syndicate that priced the SPS Series 2011 Bonds and Series 2011 BANs was led by Citi. Co-managers are Barclays Capital, Estrada Hinojosa & Company, Inc., Loop Capital Markets, Morgan Keegan, Morgan Stanley and Ramirez & Co., Inc. The financial advisor for the transaction is RBC Capital Markets and the co-financial advisor is TKG & Associates.
The PGBT-WE corridor project, also known as State Highway 161, will provide a new 11.5 mile link in the growing loop around Dallas. The corridor consists of the tolled main lanes of PGBT-WE and the frontage roads as Highway 161.