The Massachusetts Department of Transportation is looking for underwriters to work on a potential refunding of $145 million of outstanding Western Turnpike debt.
Applications to MassDOT’s request for qualifications for banking services are due Aug. 4. The authority may hold oral interviews.
Officials are considering refinancing Western Turnpike Series 1997A tax-exempt bonds for debt service savings. The bonds were sold by the former Massachusetts Turnpike Authority. There were approximately $145 million of outstanding Series 1997A bonds as of June 30, 2009.
A senior manager will be selected from the respondents to the RFQ, which also will determine the number of co-managers and syndicate members. Interested participants must detail a recommended refinancing plan, including market timing and structure. Proposals should address amortization, reserve requirements, the use of taxable or tax-exempt debt, management fees and other compensation.
MassDOT is looking to reach out to retail investors in the upcoming refunding. The RFQ invites respondents to discuss their firm’s “approach to selling this debt to retail buyers or provide a rationale as to why retail distribution is not part of your recommended plan of finance.”
The department will consider a bank’s capacity to market and underwrite Western Turnpike debt, including their “ability to distribute bonds both nationally and in Massachusetts,” the RFQ reads. The authority will take into account a bank’s technical approach, and recent experience with state issuers, revenue bonds, and other toll roads.
MassDOT took on $2.2 billion of Massachusetts Turnpike Authority debt after lawmakers abolished MassPike last year and formed MassDOT to consolidate most of the state’s surface transportation entities under one bonding authority.
Citi earlier this year priced $1.93 billion of senior and subordinate Metropolitan Highway System debt, also originally sold by MassPike. That refinancing deal helped the authority better match the bonds with outstanding swap agreements attached to the debt.