Rhode Island Commerce Corp. intends to sell $250 million of Series 2016B state Department of Transportation grant anticipation bonds – so-called Garvee bonds -- in a negotiated sale on Wednesday.
JPMorgan is the lead manager. Public Financial Management is the financial advisor.
RI Commerce is issuing the tax-exempt, serial bonds under authority granted under the RhodeWorks legislation the state legislature passed last February.
The measure, which aims to fix crumbling roads and bridges throughout the state, called for $300 million in new Garvee bonding activity, the refinancing of existing Garvee bonds and the establishment of a fund from truck tolls that Rhode Island officials estimate could generate $45 million annually.
RI Commerce, formerly Rhode Island Economic Development Corp., rebranded itself in January 2014 after the predecessor agency's entanglement in the 38 Studios bond funding fiasco.
"They've been improving how they do things and they've employed some high-quality people in the last year or two," state General Treasurer Seth Magaziner said in an interview. "I think the focus that the governor [Gina Raimondo] and Rhode Island Commerce are placing on economic development is exactly what Rhode Island needs."
Last month, Raimondo said Rhode Island would use $400 million in RhodeWorks funds to rebuild and replace bridges at the so-called Huntington viaduct, at the interchange of U.S. Route 6 and state Route 10 in Providence. Raimondo cited public safety concerns raised in a letter from the Federal Highway Administration and based on a state DOT analysis.
RI Commerce in June issued $230 million of 2016A Garvees and $40 million of airport revenue bonds.
According to an investor presentation, the 2016A refunding bonds carved out cash-flow relief of roughly $129 million for the state DOT over three years, to accelerate RhodeWorks projects.
S&P Global Ratings and Moody's Investors Service rate the 2016B bonds AA-minus and A2, respectively.
Hawkins Delafield & Wood LLP and Pannone Lopes Devereaux & West LLC are co-bond counsel. Harrington & Vitale Ltd. is representing the underwriters. Shechtman Halperin Savage LLP is representing the issuer. The state attorney general's office and special counsel Partridge Snow & Hahn LLP are representing Rhode Island.
