Louisiana will pave and upgrade more than 1,000 miles of state rural roads not eligible for federal aid with proceeds from next week’s negotiated sale of $249.2 million of state highway improvement bonds.
The Department of Transportation and Development said roads in 52 of the state’s 64 parishes will be upgraded in the first two years of the three-year improvement program and 11 parishes in the third.
Orleans Parish is not eligible for the road program.
The 20-year bonds were authorized by the 2012 Legislature.
The highway department had planned on three annual tranches, but moved to a single sale at the urging of state Treasurer John Kennedy.
A single sale early in the program would result in lower interest costs and more money for projects, according to the treasurer.
The bonds are rated AA-minus by Fitch Ratings and an equivalent Aa3 by Moody’s Investors Service.
Citi is lead manager for the issue. Co-managers include Loop Capital Markets, Morgan Stanley, Raymond James | Morgan Keegan and Stephens Inc.
Foley & Judell LLP is bond counsel. Lamont Financial Services is the state’s financial advisor.
Support for the bonds is provided by half of the annual revenues from commercial truck licenses and fees deposited into the State Highway Improvement Fund.
Proceeds from road bond issue had been expected to total more than $300 million based on the fund revenue, with annual debt service of around $20 million.
Although the official Revenue Estimating Conference outlook expects the truck and trailer fees to total $51 million in fiscal 2013, the state opted to size the issue based on annual fund revenues of $40 million.
Pledged revenues into the fund have averaged 13% a year since 2000, though they have fluctuated from a high of more than 45% to a low of 15%.
The Louisiana State Bond Commission in November approved a sale of up to $350 million of the road bonds.