CHICAGO — The Illinois State Toll Highway Authority board has approved refunding up to $1 billion of debt in a deal led by Goldman Sachs and Jefferies & Co. and assigned Morgan Stanley the lead spot on a future new-money deal that may tap the Transportation Infrastructure Finance Innovation program.

The authority is eying a refunding of up to $1 billion of its Series 2005A and 2006A bonds for savings. About $770 million is outstanding from the 2005 issue and another $291 million from the 2006 issue. “Issue size will be determined based on economics of the refunding, but likely will not include the entire amount,” an ISTHA spokeswoman said.

Goldman and Jefferies are the senior managers. Bank of America Merrill Lynch and Siebert Brandford Shank & Co. are co-seniors. Another six firms round out the syndicate as co-managers.

The board also approved the appointment of Morgan Stanley to senior manage a future new-money sale slated for later this year or next year. The other underwriting members of the team will be rounded out at a later date.

The assignment was made to help the authority in assessing its use of the federal TIFIA program and “to facilitate necessary advance work on financing structure components including the extensive process for requesting/obtaining credit assistance via” the TIFIA program, according to authority documents.

The program provides loans and loan guarantees for rail lines, marine ports, pipelines, airports, highways, bridges, public transportation systems and other transportation-related projects.

The toll agency plans a series of deals this year to fund a $12 billion, 15-year capital program known as Move Illinois, refund debt for savings, and convert synthetic fixed-rate securities to a traditional fixed-rate structure. The first sale to raise about $500 million of new money is expected to hit the market in mid-April. The board in January approved a team led by JPMorgan and Loop Capital Markets as senior managers for what would mark the first borrowing to under Move Illinois.

The board in January also approved a second slate of broker-dealers to underwrite either a second tranche of new-money — also for about $500 million — or a refunding that would convert up to $570 million of synthetic fixed-rate bonds to fixed rate. The team would underwrite whichever deal is ready first and would be led by Citi and Barclays Capital in the senior manager slots.

All of the firms were drawn from new pools of qualified underwriters established last August by the authority after a competitive selection process. The board approved a $1.5 billion 2013 budget in December that relies on a total of $1 billion in new-money debt issuance this year.

The ISTHA last year launched projects under its new capital program aimed at reducing congestion and pollution, expanding the 52-year-old, 286-mile system, improving roads, and creating jobs and economic development in the region.

Move Illinois offers $8 billion for improvements to existing roads and $4 billion for new and expanded roadways. A steep toll hike of 87.5% will go toward repaying $4.8 billion of borrowing for the program.

Moody’s Investors Service rates the authority Aa3. Fitch Ratings and Standard & Poor’s rate its $4 billion of debt AA-minus. Fitch assigns a negative outlook. Debt service has a priority claim on the system’s revenues that primarily come from toll collections after operations are funded.

The credit is supported by strong traffic demands, the essential nature of the system, flexibility to raise rates, strong liquidity, proactive financial management, and the on-time delivery of the system’s former capital program, which is nearly complete, Fitch said in a recent report.

The rating also reflects such challenges as a dependence on traffic growth to maintain debt-service coverage ratios and the need to refinance variable-rate debt in the coming years. Nearly 33% of the authority’s outstanding debt is variable rate, although the agency anticipates lowering that percentage down to 21% by 2015.

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