The North Carolina Turnpike Authority has received a conditional letter of commitment from Assured Guaranty Corp. that could allow it to issue its first bonds in June, says executive director, David Joyner.
The agency has been trying to bring a $650 million deal to market to build the 18.8 mile Triangle Expressway around Raleigh. The credit crisis blocked its access to credit enhancement. It would likely get a triple-B rating without insurance or a letter of credit, sources said.
The agreement with Assured hinges on legislation pending in the General Assembly. For it to work, the legislature must pass a bill that transfers $25 million from the state’s highway trust fund to the authority for debt service payments for 40 years or more.
The bill also would allow bonds that are refinanced to have maturities that extend beyond 40 years — a requirement being sought by Assured, Joyner said.
Under current state law, 40-year bonds that are refinanced 10 years into the deal must mature in 30 years or less, he said. The current legislation would allow the refinancing bonds to mature in 40 years from the new date of issuance, he said.
The bill has passed the Senate. The authority’s board will vote today on the bond insurance, Joyner said, adding that the bonds are expected to price in mid-June.
Assured was downgraded to AA by Fitch Ratings on Monday, leaving it with one remaining triple-A rating from Standard & Poor’s.