U.S. Bank NA on Tuesday notified holders of the Connector 2000 Association Inc.’s 2011 toll revenue term bonds that an exchange of bonds will take place around May 31.

The bonds, issued as part of the South Carolina association’s bankruptcy restructuring, need to be exchanged to correct a deficiency in the structure so they can be traded.

U.S. Bank is the trustee.

The affected debt involves $113.5 million of term bonds structured with a pro-rata redemption feature to provide investors with an equal share of the cash flow. After distribution of the 2011 bonds, investors found that they did not conform to brokers’ trading platforms and were effectively untradeable.

The exchange will give investors new term bonds with by-lot redemption provisions, which will allow them to be registered by the Depository Trust Co. at maturity value and will permit the term bonds to be traded.

Bondholders who don’t want to participate in the exchange must notify the DTC by May 17 and keep all of their original bonds. Details about the exchange have been posted on the Municipal Securities Rulemaking Board’s EMMA system.

The Connector Association sold $200 million of bonds in 1998 to build the 16-mile-long Southern Connector start-up toll road near Greenville.

The toll road never came close to meeting traffic and revenue projections.

The association defaulted on the bonds in January 2010 and filed for bankruptcy about six months later. In the Chapter 9 case, the outstanding debt was reduced to $150 million from $329 million.

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