Regional News

NTTA Offering a Texas-Sized $1.3B

DALLAS — In what will likely be the largest deal in Texas so far this year, the North Texas Tollway Authority is preparing to issue $1.3 billion for the western extension of its President George Bush Turnpike.

The sale, $800 million of bonds and $500 million of notes, will take place in March and early April, the NTTA said. The debt represents a new credit for the agency because they are the first securities not backed by system-wide revenues.

The underwriting syndicate pricing the Series 2011 bonds and Bans will be led by Citi.

Co-managers are Barclays Capital, Estrada Hinojosa & Co., Loop Capital Markets, Morgan Keegan & Co., Morgan Stanley, and Ramirez & Co.

The financial adviser is RBC Capital Markets and the co-financial adviser is TKG & Associates. McCall Parkhurst & Horton is bond counsel.

To make the bonds and notes marketable, the NTTA negotiated a guarantee from the Texas Department of Transportation to cover any debt service in the event that project revenues prove insufficient.

The backing by TxDOT is the first for a toll project of this type in the state and was prompted by the lack of affordable bond insurance.

The bonds will be identified as special projects system revenue bonds and will be tax-exempt. The Bans will be taxable.

The bonds will be secured by the tolls of the Texas State Highway 161 tollway that has been renamed the President George Bush Turnpike Western Extension.

The NTTA is issuing the bonds in anticipation of a future $423 million loan from the Transportation Infrastructure Finance and Innovation Act.

TIFIA, a program of the Federal Highway Administration that provides credit assistance for infrastructure projects, was designed to encourage private investment by providing loan security.

Though the program has been in existence since 1998, demand for access grew significantly during the recession, and applications have outstripped availability by a factor of eight to one, according to NTTA officials.

Delays in providing the federal low-cost loan of $423 million to complete the PGBT Western Extension — tentatively awarded more than a year ago — could cost toll-payers up to $100 million in extra interest charges, NTTA officials have estimated.

The authority, which has become the primary highway builder in North Texas, is managing the PGBT Western Extension as it also undertakes its first project in Tarrant County, the 13.1-mile Southwest Parkway-Chisholm Trail project that will extend to Johnson County, south of Fort Worth’s Tarrant County.

The tollway will link up with the authority’s existing system, carrying traffic between Dallas and Fort Worth and their suburbs.

The NTTA will hold a public hearing Wednesday in Johnson County on the project’s finances.

It expects to issue about $750 million of toll revenue bonds with 22-year maturities. With interest, the total cost would be $947 million, according to estimates.

North of Dallas, the authority is nearing completion of the $3.2 billion Sam Rayburn Tollway, also known as State Highway 121. Financing for the deal began in 2008 just as the credit markets were collapsing. Despite the upheaval, the NTTA managed to issue the debt and cover the cost of the project.

Victor Vandergriff of Arlington chairs the NTTA board and is the first official from Tarrant County to hold the position. He has said the authority’s decision to compete for the SH 121 project against private toll concessionaire Cintra of Spain was a mistake.

An ambitious future project known as the “Outer Loop” is also making headway after the authority and Collin County, north of Dallas, reached agreement on a framework for the development of all future turnpike projects in the county.

The Outer Loop is a proposed regional beltway that will span about 52 miles of Collin County. Under the new agreement, the NTTA and the county will collaboratively advance the planning, construction, maintenance, and operations of the Outer Loop, as well as future tollways.

“We have worked well together in the past with Collin County and this agreement ensures that good relations will ­continue well into the future,” said NTTA director Bill Moore.



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