DALLAS — Colorado's Regional Transportation District plans to price $197 million of revenue bonds Thursday.
RTD spokesman Scott Read said the deal is expected to close Nov. 17 after pricing through a syndicate led by Goldman Sachs.
"We expect institutional investors looking for double-A rated municipal bonds such as mutual funds, pension funds and insurance companies will be interested," Read said. "Some retail investors may also be interested."
Chris Elmore, vice president for book runner Goldman Sachs, is lead banker on the deal.
First Southwest Co. managing director Mike Newman and director Jason Simmons are financial advisors.
With maturities through 2050 and a 10-year call, the sales-tax revenue bonds carry ratings of AA-plus from S&P Global Ratings, Aa2 from Moody's Investors Service, and AA from Fitch Ratings. Outlooks are stable.
The bonds are called "0.4% bonds" because that is the portion of the district's 1% sales tax devoted to FasTracks, a special rail program authorized by voters in 2004.
Voters authorized up to $3.477 billion of FasTracks sales tax bonds for the construction of light rail, commuter rail, bus, and related facility capital improvements. RTD has about $785 million in unused FasTracks debt authorization remaining, according to S&P. However, Colorado's Taxpayer Bill of Rights constrains additional issuance to $150 million without new voter approval.
RTD achieved a major milestone in April with the opening of its $2.2 billion commuter rail line between downtown Denver's Union Station and Denver International Airport. That project, combining federal and local government funds with private equity, was considered the largest public-private project in the nation.
The DIA commuter line was one of the showpiece projects for the FasTracks system.
"RTD is opening five major new services throughout the Denver metropolitan area this year alone," Read said. "Three have already opened and the remaining two are scheduled to open later this year."
Following this deal, RTD will have $1.92 billion in 0.4% FasTracks debt outstanding. Annual debt service for the 0.4% debt increases from $69.8 million in 2016 to a peak of $174.9 million in 2036 and then declines to $71.1 million for 2047 through 2050. All of the district's debt is fixed rate.
RTD's service area has an estimated population of more than 3.1 million or approximately 57% of the Colorado's population. The Denver area's economy continues to grow, despite a slowdown in the energy and mining sectors, analysts said.
"The stable outlook on the 0.4% sales tax-secured FasTracks bonds reflects our view of the large and diverse economic base generating the pledged tax, good coverage of debt service by the first lien 0.4% tax pledge and very strong coverage by the combined first-lien 0.4% sales tax and second-lien 0.6% sales tax," S&P analyst Jennifer Hansen said. "We do not expect to change the rating over the two-year outlook timeline."