Louisiana to Sell Road Bonds in One Go

The Louisiana State Bond Commission will consider in November the final structure for up to $350 million of state road bonds to be sold at one time after state officials last week agreed switch gears from a plan to spread out issuance in three tranches over the next three years.

The accelerated schedule was adopted at the request of state Treasurer John Kennedy, who chairs the Bond Commission.

A sale of the bonds as soon as possible would result in a lower interest rate than could be obtained by stretching out the tranches, Kennedy said.

As the economy improves, he said, rates will go up.

“If interest rates are lower in three years than they are right now, we’ll have bigger problems than just a bond issue,” he said. “If rates go up, we’ll pay more in interest and have less to spend on roads.”

Transportation Secretary Sheri Bas said the Department of Transportation and Development agreed to the revised schedule on the advice of the state’s financial advisor and bond counsel.

The 20-year state highway revenue bonds were authorized by the 2012 Legislature, with the proceeds dedicated to maintaining and upgrading more than 1,000 miles of rural state roads that are not eligible for federal matching funds.

The bonds will be supported by half of the annual revenue currently going to the state highway improvement fund.

The fund receives $50 million to $60 million a year from driver’s license fees and commercial vehicle registrations.

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Transportation industry Louisiana
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