BRADENTON, Fla. — The Santa Rosa Bay Bridge Authority meets Wednesday to continue working toward a resolution on its $115.9 million of defaulted bonds, which were sold to build a toll bridge in north Florida.
It is not clear what specific items the authority’s board will address. An agenda for the meeting was not posted at press time on the SRBBA’s website at www.garconpointbridge.com.
The board is expected at some point to explore restructuring options with FTI Consulting, a financial advisor hired by the trustee, Bank of New York Mellon.
In December, the Bridge Authority board met for the first time in nearly a year, because new members had been appointed. Most of the previous board resigned after the Securities and Exchange Commission launched an investigation believed to center around the agency’s disclosure practices.
The SRBBA experienced its first payment default on July 1. BNY Mellon declined to make a partial payment because there was not enough in the reserve account to make a full payment.
Paul Steets, an executive vice president for Texas-based GMS Group LLC, said at the December meeting that an ad hoc bondholders committee of retail and institutional investors had been formed. He also said that enough revenues from toll collections were available to make some or all of the July debt-service payment.
“I believe you have a fiduciary responsibility to pay bondholders,” Steets said.
The board did not act on his request.
A representative from FTI told the board that it may be possible to restructure the debt if bondholders agree. A specific plan was not discussed.
In a notice last week, BNY Mellon told bondholders that no payment was made Jan. 1.
“Gross revenues have been insufficient to pay required debt service on applicable bonds,” the trustee said.
The Bridge Authority in 1996 sold $75.5 million of Series A current-interest bonds maturing in 2028, and $19.4 million of Series B capital-appreciation bonds maturing between 2005 and 2028. About $115.9 million of bonds are outstanding due to accretion on the capital appreciation bonds.
Bond proceeds were used to build the 3.5-mile Garcon Point toll bridge, which has suffered from much lower-than-forecast traffic since it opened in May 1999. The SRBBA began dipping into reserves in 2002 to supplement debt-service payments. The reserve was exhausted last year, resulting in payment default.
The bonds were not insured at initial pricing; however, it is believed that investors holding about 30% of the bonds insured them in the secondary market.