CHICAGO -- The Ohio Turnpike Commission expects to issue requests for qualifications by March 1 for underwriters and bond counsel interested in working on a $1.5 billion bond deal that features a new turnpike credit pledge.
The commission recently issued an RFQ for financial advisors interested in the deal. Firms have until Tuesday to respond to that request.
The Legislature still needs to approve the deal, which is a key part of Gov. John Kasich’s new two-year budget. The governor hopes to pump $3 billion into infrastructure spending over the next several years by issuing $1.5 billion of turnpike-revenue backed bonds.
Kasich unveiled the plan in December after spending nearly a year considering privatizing the 241-mile toll road. He instead proposed expanding the commission’s borrowing authority by crafting a new credit backed by future toll revenues and allowing bond proceeds to finance transportation infrastructure projects across the state, not just around the turnpike. The commission will raise toll rates as part of the deal.
The turnpike commission last week approved the issuance of a request for qualifications from underwriters interested in bidding on the work and an updated RFQ from bond counsel who responded to a 2012 request from the commission.
The commission expects to release the RFQs by the end of this week, a spokesman said. Firms will have roughly two weeks to respond. The commission staff expects to make a recommendation to the full board at its April meeting, the spokesman said.
The resolution authorized last week allows the commission to issue $1.1 billion of bonds in 2013 to fund projects at the turnpike and elsewhere in the state.
If lawmakers approve the deal, the state hopes to enter the market late summer or early fall, officials said.
House Bill 51 would rename the commission the Ohio Turnpike and Infrastructure Commission and would allow it to issue revenue bonds to finance projects outside of the one-mile turnpike radius to which it is currently restricted.
The credit would feature a new junior lien trust agreement that would allow the commission to issue bonds against future toll revenue projections. Currently it is restricted to issuing bonds with coverage levels tied to historic revenues.
The new debt would be subordinate to the commission’s existing $556 million of existing bonds. The new indenture would create second senior lien bonds and subordinate bonds.
KPMG, which acted as the state’s advisor when it was considering whether to privatize the turnpike or expand its bonding authority, recommended that the debt be issued in two series, including roughly $1 billion in 2013 and $500 million in five years.
