The Louisiana State Bond Commission approved nearly $1.3 billion of bonds for a controversial steel plant project planned to be built between New Orleans and Baton Rouge.
The commission approved $900 million revenue bonds to be issued by the Louisiana Public Facilities Authority to acquire, develop and equip a recycled steel plant.
A limited liability company led by Hyundai Steel will use the proceeds to help fund construction of a low-carbon integrated recycled steel mill expected to be completed in March 2029.
BofA Securities is the lead underwriter. The bonds are expected to be rated Baa3 by Moody's Ratings and BBB-minus by S&P Global Ratings.
The facility will also receive $385 million of funding from Port of South Louisiana lease revenue bonds. The bonds are expected to mature in November 2031.
The port project will consist of at least two phases: a heavy haul road and a construction bridge and a permanent marine terminal that will extend over the Mississippi River Levee to the steel mill and be used for transporting goods to the steel mill.
The Port of South Louisiana will construct and own the port project, except for the land. All dockage and wharfage fees will go to PSL.
PSL will lease the facilities to the joint venture led by Hyundai Steel, and that venture will use and maintain the facilities for 39 years after project completion. The venture will make lease payments equal to debt service. In addition, Hyundai Steel will sign guaranties to fund the project. In lieu of a guarantee to repay the bonds, Hyundai Steel may elect to provide an irrevocable direct-pay letter of credit.
Government Consultants will serve as municipal advisor.
Advocacy groups Louisiana Bucket Brigade and Rural Roots Louisiana sued to
Rural Roots Louisiana member Twila Collins said, "I am a Modeste resident," the town nearest to the planned steel plant. "I am in opposition to the state giving Hyundai any bonds. Hyundai is a billion-dollar company. If they have that kind of money, why do they need ours?"
"These deals with Hyundai have no enforceable mechanisms for employment and are lopsided giveaways from Louisiana taxpayers to a corporation that's not even from here," said Anne Rolfes of the Louisiana Bucket Brigade.
