A deal delayed by tariff volatility has priced after pulling its $125 million of local income tax revenue bonds, Series 2025A, amid April's tariff upheaval.
Stifel priced for the Indianapolis Local Public Improvement Bond Bank (/AA-//) $125 million of revenue bonds, with 5s of 7/2029 at 3.20%, 5s of 1/2030 at 3.27%, 5s of 7/2030 at 3.27%, 5s of 1/2035 at 3.67%, 5s of 7/2023 at 3.69%, 5s of 7/2040 at 4.18% and 5s of 1/2045 at 4.59%, callable 7/15/2035. Delivery is expected on or about May 21 after the May 7 pricing.
The bond bank sold the bonds, which were originally set to price in April, for the Indianapolis Public Transportation Corp., or IndyGo. The issuer
"A brief window of clarity on tariffs and underlying economic factors gave investors confidence in the deal at the levels we were pricing," said Lisa Soard, director of communications for IndyGo.
IndyGo will use proceeds to finance construction of the Blue Line Bus Rapid Transit Line project, which spans a 24-mile corridor between Indianapolis International Airport and downtown Indianapolis, then stretches to the eastern edge of Marion County. It includes 36 stations.
The 2025A bonds were issued to procure funds for the project; to refund bond anticipation notes issued in November; to pay capitalized interest; to fund a debt service reserve; and to pay costs of issuance.
When the City-County Council approved the issuance of the notes and bonds, it also approved a special ordinance pledging transportation local income tax revenues to IndyGo for the payment of principal and interest on the debt. The bonds are secured by a first-lien pledge of special purpose 0.25% transportation LIT revenues collected within Marion County.
Crowe LLP is the municipal advisor on the deal. Faegre Drinker Biddle & Reath LLP is bond counsel.
S&P Global Ratings affirmed IndyGo at AA-minus and stable March 26.
"The rating reflects our opinion of IndyGo's role as an essential public transit system and favorable financial metrics stemming from significant LIT revenue," said S&P senior analyst Andrew Stafford.
Stafford told The Bond Buyer in April that S&P expects consistent revenue growth in the 0.25% transportation local income tax relative to IndyGo's current and projected annual debt service requirements.
The Blue Line is the third and final leg of Indianapolis' bus rapid transit system, IndyGo's Soard said. It replaces Route 8 and will be the longest bus rapid transit route in IndyGo's network.
"The Blue Line is more than just a new transit route," she said. "It is a monumental infrastructure project that will make it safer, faster and more reliable to travel along the corridor — whether you ride the bus or drive a car. Once complete, it will have added or improved more than nine miles of sidewalks, 350 ADA curb ramps, two miles of crosswalks and 45 lane miles of street pavement."
With a route that passes within walking distance of more than 114,000 jobs and 45,000 people, the Blue Line "is already attracting" about $400 million in economic development, Soard said.
Joe Glass, executive director and general counsel for the bond bank, called the pricing "successful."
