Bond Buyer editors in prior years have presented the newspaper’s Deal of the Year award to transactions that represent a cross section of municipal finance, from housing bonds to power bonds to water bonds and bonds to build sport stadiums. This year we decided on bridges.
When Massachusetts found itself facing a $2.4 billion transportation funding gap, its legislature responded by authorizing the “Accelerated Bridge Program,” a statewide initiative to repair and rehabilitate about 600 structurally deficient bridges.
To finance the ambitious plan the state devised a complex three-pronged bond offering totaling over $1 billion — part new-money, part refunding debt. The deal was broken into notes, bonds, taxable Build America Bonds, and recovery zone bonds. It called for the creation of two new highly rated credits, the amending of an existing credit, and the closure of the liens for two lower-rated credits. The transaction took advantage of the expiring federal economic stimulus program and Massachusetts was able to attract significant investor interest.
In addition to being named the Deal of the Year, the transaction also won the regional DOTY award for a deal in the Northeast region.
“Nobody in government likes to borrow, but when you’re building bridges, airports and roads, you have to borrow and you have to do it well,” said Colin MacNaught, Massachusetts’ assistant treasurer for debt management. MacNaught accepted the award for Massachusetts at the Deal of the Year ceremony in New York City on Thursday night.
This year’s ceremony also saw the presentation of the inaugural Freda Johnson Award honoring Trailblazing Women Issuers. This year’s honoree was Connecticut Treasurer Denise Nappier.
The 2011 awards, which considered deals that closed between Oct. 1, 2010, and Sept. 30, 2011, drew 80 nominations for transactions ranging in size from $5 million to several billion dollars. Nominations included financings for transportation, health care facilities, highways and toll toads, sewer projects, airports, bridges, hydroelectric and alternative energy projects, convention centers and more. The deals were executed in a period of great economic uncertainty and financial market volatility.
The entries were evaluated by Bond Buyer editors and bureau chiefs.
The newspaper also selected a winner for its award for nontraditional public finance transactions. The award, presented for the first time in 2006, reflects the growth of this nontraditional sector.
Other winners were:
Southwest: The Love Field Modernization Corp.’s $310 million of special facilities revenue bonds.
Midwest: The Metropolitan Pier and Exposition Authority’s $1.1 billion of McCormick Place Expansion Project bonds.
Southeast: The Atlanta Department of Aviation’s $1.5 billion new-money and refunding deal.
Far West: Washington’s $89 million motor vehicle fuel tax general obligation bonds.
Small Issue: Ecorse, Mich.’s $9.5 million of financial recovery bonds.
Health Care: Adventist Health System (Florida) for its $1.75 billion credit facility restructuring and $665 million bond restructuring.
Nontraditional Financing: the Judicial Council of California Long Beach Court Building Project.