The Maine Municipal Bond Bank snagged double-A ratings on an upcoming $50 million TransCap revenue bond deal, a new credit for the state that will help finance transportation needs.
Fitch Ratings and Standard & Poor’s rate the TransCap bonds AA-minus and AA, respectively. Moody’s Investors Service does not rate the credit.
The bank originally was going to begin a two-day retail order period for the TransCap bonds on Friday, but postponed the $50 million deal due to market conditions, according to the Bank’s executive director, Bob Lenna.
Citi is senior manager on the transaction. Wachovia Bank NA is co-senior manager. Hawkins, Delafield & Wood LLP is bond counsel. There is no outside financial adviser.
If “this new proposal to take the toxic mortgage loans out of the banking system [works], and things sort of settle down, we can do it at the end of the week if we want to, but my guess is it will wind up being done after Oct. 6,” Lenna said Friday, referring to the latest efforts by the government to stabilize the financial system.
Officials now anticipate selling the TransCap bonds after the bank issues its semi-annual general resolution bond deal. That $100 million transaction is set to price on Oct. 3 with a two-day retail order period. Wachovia Bank is book-runner and Citi is co-senior manager on the deal. Hawkins Delafield is bond counsel.
The TransCap fund is a new credit for the state and will help Maine finance transportation infrastructure. Increased revenues and redirected funds will help support the program. Lawmakers approved allocating $5 million from the state’s highway fund to the TransCap Fund by June 30.
In addition, officials anticipate the TransCap fund will gain roughly $16 million per year as the state will now direct 7.5% of its total gas tax revenues to it and will also receive about $14.6 million annually in increased motor vehicle fees. Combined, the fund will gain about $30.6 million each year.
To help Maine address its growing road and bridge-repair needs, lawmakers approved the creation of the TransCap fund in April. The bond bank can issue up to $160 million over the next five years on behalf of the program.
Officials peg total transportation infrastructure needs at roughly $3 billion over the next 10 years, according to Karen Doyle, director of capital resource management at the Department of Transportation. The TransCap program will help finance those needs, along with grant anticipation revenue vehicle bonds. Last month, the bank sold $50 million of grant anticipation revenue vehicles to help support road and bridge projects throughout the state.
