The New Orleans Regional Transit Authority will ask the Louisiana State Bond Commission to approve a $75 million offering to help finance a $165 million expansion of the city’s streetcar system.
The NORTA commissioners voted last week to seek permission to issue 30-year bonds supported by a dedicated 0.5% sales tax in Orleans Parish.
Authority officials said the request should be on the commission’s agenda in July.
If the request is approved, NORTA expects to issue the bonds by the fall. The board has selected Morgan Keegan & Co. as underwriter.
The authority has not issued revenue bonds since 1998.
Standard & Poor’s dropped its rating on NORTA’s tax-supported debt to BBB-minus shortly before Hurricane Katrina cut the devastated system’s ridership by more than 70% in 2005. The rating was raised to A-minus in August 2009.
The authority has approximately $112 million of outstanding debt. Annual debt service is $14 million in fiscal 2010, but will drop to $9 million in fiscal 2011 as older debt matures.
Officials said the expected drop would allow the new bonds to be issued without raising debt service above the current level.
The expansion project would also be financed with $75 million in federal transit grants that are anticipated by NORTA.
The local share would include $75 million in bond proceeds, $13 million from agency reserves, and $13 million that had been set aside for an expansion of the downtown Morial Convention Center that has been deferred.