CHICAGO – Underwriters interested in working on nearly $1 billion of planned borrowing by the Illinois State Toll Highway Authority over the next three years have until Friday to apply.
The authority opened a request for proposals Jan. 12 to establish a new senior manager pool of up to 14 firms and a co-manager pool of up to 15 firms. Respondents may only apply for one of the two pools.
The pools will run for an initial term of three years although they can be renewed as long as the total term does not exceed 10 years. The deadline is 10:30 A.M. Central Time Friday. Firms will be chosen based on a scoring system.
"After the senior pool and the co-manager pool are established, the Tollway will select, on an as/if needed basis, one or more firms from the appropriate pools for each bond issuance for which bond underwriting services are needed," the RFP says.
"For bond underwritings, in order to secure the best value for the Tollway's bond offerings, the tollway intends to utilize all of the firms qualified by this procurement process, in order to ensure that the tollway's bonds become available to the broadest possible marketplace of institutional and retail investors," it continued. The Tollway intends to use all firms before any firm is chosen for a second transaction.
The authority is tentatively planning to issue $300 million this year, another $400 million next year and $200 million in 2019. An additional $200 million is planned in 2020 and $500 million is planned in 2021.
The $300 million in borrowing planned this year is part of the authority's approved $1.7 billion budget as the agency moves into the sixth year of its $12 billion, 15-year capital program.
The authority board at its December meeting approved the budget, which includes $961 million for capital projects, $405 million for debt service, and $336 million for maintenance and operations. In addition to bond proceeds, the budget is funded with $1.38 billion in revenues generated by the 292-mile system.
Revenues are projected to rise by $80 million to $1.38 billion next year primarily due to scheduled commercial truck toll increases approved in 2008, a projected increase in toll transactions, and implementation of the new Illinois Route 390 Tollway. Passenger vehicle toll rates will hold steady.
The capital program mostly funds projects included in the $12 billion Move Illinois program. It provides $374.5 million to continue building the new Illinois Route 390 Tollway and planning for the new I-490 Tollway as part of the Elgin O'Hare Western Access Project. About $295 million has been budgeted for systemwide roadway, interchange and bridge repairs and other work to keep the existing tollway system in good repair.
To support the capital program, the board in 2011 adopted a one-time 87% increase in passenger tolls and is phasing in a 60% increase in commercial vehicle tolls that will also be adjusted annually based on inflation starting in 2018.
Ahead of a sale earlier this year, three rating agencies affirmed the authority's AA-minus-level ratings on about $6 billion of debt secured by toll revenues. All assign a stable outlook.
