Brisa/CCR Closes on 99-Year, $603M Colorado Tollway Deal

DALLAS — Colorado’s Northwest Parkway Public Highway Authority yesterday closed on a $603 million deal turning the financially troubled tollway over to the Portuguese-Brazilian consortium Brisa/CCR for 99 years. The ceremony at the Northwest Parkway headquarters in the Denver suburb of Broomfield allows the authority to retire all bonds and other obligations used to finance the nine-mile toll road. Brisa expects to make the road profitable through increased efficiency and improved service to the communities that use the tollway. “Working with the authority, we will be able to improve the parkway’s operation,” said Brisa/CCR spokesman Franco Caruso. “We will mutually add value to the project.” The wire transfer of $503 million to the trustee will be received tomorrow, at which point the senior and subordinate bonds will be defeased, a spokeswoman for the authority said. The remaining $100 million of the payment will go into escrow. Caruso said he would not be able to disclose Brisa’s finance package for the deal until tomorrow. The authority will continue to exist as a legal entity that is expected to regain operational control of the toll road once the lease expires a century from now. The authority’s board of directors will continue oversight of the project, with annual reports to the Colorado General Assembly on operations and finances. The agreement also provides committed funding for a potential 2.3-mile extension of the toll road to State Highway 128 in Broomfield. Brisa/CCR is shorthand for two companies that formed a partnership to operate the tollway. Brisa Auto-Estradas de Portugal is based in Lisbon, Portugal. The partner agency, Companhia de Concessoes Rodoviarias is based in Sao Paulo, Brazil. Brisa/CCR emerged the winner among 11 bidders for the project in April. In August, the two parties signed the concession agreement, with the financial close coming yesterday. The authority, made up by the Denver suburbs of Broomfield, Lafayette, and Weld County, paid its last debt service payment of $7 million on June 15 as scheduled. The parkway opened to traffic in November 2003 with revenue expected to come in at 1.4 times debt service. However, traffic was lower than predicted, with toll revenue of $6.8 million in 2006, 39% of original forecasts. Combined senior and subordinate debt service totaled $8.4 million in 2006. While debt service was scheduled to increase 15% per year after 2007, annual toll revenue was only expected to grow 13% this year, according to Standard & Poor’s. The tollway is the first privately leased segment of what is expected to become a complete loop around the Denver metro area. The only missing section between Northwest Parkway and the non-toll Colorado 470 runs through Golden. After the parkway authority announced its negotiations with Brisa/CCR on April 10, Standard & Poor’s affirmed its B-minus underlying rating on the authority’s Series 2001A-C senior bonds and its CCC rating on the authority’s 2001D subordinate bonds. The outlook remained negative. Moody’s Investors Service downgraded the authority’s $364 million of senior revenue bonds to B1 from Baa3 in December 2005. Fitch Ratings downgraded the senior debt Series 2001A, 2001B, and 2001C last year to CCC-plus from BB-minus and maintained a negative outlook. The parkway’s senior revenue bonds were insured by Ambac Assurance Corp. and Financial Security Assurance.