The Los Angeles County Metropolitan Transportation Authority sold about $900 million of debt this week to refund older bonds and finance transit projects, including an extension of a subway line that will serve UCLA and the future Olympic village for the 2028 Summer Games in the city.
The securities, rated AAA by S&P Global Ratings and Aa1 by Moody's Ratings, are backed by a 0.5% county sales tax that voters approved in 2008, called Measure R, to help pay for transportation needs. About $326 million of the sale refunded bonds issued in 2016, with the remainder repaying short-term debt and funding capital projects, offering documents show.
The senior-lien Measure R bonds sold this week included debt maturing in 2039 and carrying a 5% coupon, which priced to yield 3.12%, or 18 basis points below an index of benchmark tax-exempt municipal debt, data compiled by Bloomberg show. The bonds changed hands Thursday in two separate trades at the same 3.12% yield.
Morgan Stanley was senior manager. Montague DeRose and Associates was municipal advisor. Norton Rose Fulbright LLP was bond counsel.
Metro, as the authority is known, is expanding rapid transit and bus service throughout Los Angeles County as part of an initiative to provide more public transportation and to better connect to major sports venues in anticipation of
Metro is working to extend its D Line subway westward to connect downtown Los Angeles to the University of California at Los Angeles, West Los Angeles VA Medical Center and the future athlete village for the 2028 Games, according to
A four-mile extension to the corner of Wilshire Boulevard and La Cienega Boulevard is slated to open in May.
The final section, which includes the Olympic village, is expected to open in the fall of 2027 and will offer a 25-minute ride from downtown to West LA.
While the authority has a large capital improvement plan that will boost borrowing, it benefits "from the large, prosperous, and diverse economy of Los Angeles County, with high wealth and income levels," S&P analysts wrote in a March report. "We expect LACMTA's robust economy will support the pledged revenue streams' strong performance, low volatility across economic cycles, and robust debt service coverage."
Metro had $1.2 billion of Measure R senior-lien sales-tax debt outstanding and another $1.2 billion of junior-lien Measure R debt as of March 1, according to bond documents. The 0.5% levy is set to expire in June 2039, which is the final maturity for the bonds.
Metro plans to sell about $338 million of Proposition C senior sales-tax bonds next week to refund debt and pay for capital projects. The debt is backed by a 0.5% sales-tax throughout the county that voters approved in 1990 and that doesn't expire, according to bond documents.
