Bay Area Toll Authority Set for Big Deal

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PHOENIX - The Bay Area Toll Authority is set to sell $450 million of bonds Thursday to fund capital projects and refund outstanding debt.

BATA oversees the revenues from the region's seven state-owned toll bridges. The negotiated deal consists of $300 million in new money and $150 million of refunding bonds.

The new money will be senior lien debt rated Aa3 by Moody's Investors Service, and AA by both S&P Global Ratings and Fitch Ratings. It will finance costs related to the demolition of the former eastern span of the Bay Bridge, among other things.

The refunding bonds will refund debt from 2010, 2013, and 2014, and will be subordinate lien debt rated A1 by Moody's and AA-minus by S&P.

Brian Mayhew, chief financial officer of the Metropolitan Transportation Commission, which oversees BATA, said that investor meetings will take place early the week of the sale in Boston, Philadelphia, and New York, and that he believes conditions are favorable.

"It's a good market for us," Mayhew said.

Handling the pricing is a large underwriting syndicate including Bank of America Merrill Lynch, Citi, Goldman Sachs, J.P. Morgan, Barclays, and Morgan Stanley. PFM is municipal advisor for the authority, and Orrick, Herrington & Sutcliffe is bond counsel.

BATA, originally created by the state Legislature in 1997 to administer what was then the base $1 auto toll on the Bay Area's bridges, collected over $700 million of tolls in 2016 and now manages a multi-billion dollar debt portfolio. Tolls, collected in one direction, are now $5 on most bridges at most times, with a $4 to $6 range for the Bay Bridge.

BATA has seen its toll revenues climb every year since 2010, when it collected $466 million. In 2005 the legislature expanded BATA's responsibilities to include administration of all toll revenue from the region's toll bridges as well as joint oversight of the state Toll Bridge Seismic Retrofit Program with the state Department of Transportation and the California Transportation Commission.

BATA is also planning another large financing in mid-February, Mayhew said. That deal, which will be senior-lien term rate refunding bonds sold in four series, is expected to top $500 million when totaled together.

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Transportation industry California
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