BRADENTON, Fla. — The Miami-Dade County Expressway Authority, after a four-year hiatus, is back in the bond market this week with $345 million of toll-revenue bonds.
The new-money transaction was increased by about $85 million due to favorable institutional rates, according to chief financial officer Marie Schafer.
“There are lower yields in the market so we did upsize issuance in order to fund our five-year capital improvement program,” she said.
The CIP includes completing the conversion of the authority’s five expressways to electronic open-road tolling.
The senior-lien bonds are pricing for retail today and institutional investors tomorrow.
The Series 2010A new-money bonds are expected to be structured in two terms maturing in 2034 and 2040 to achieve level debt service.
Market conditions permitting, the 2010A bonds are expected to include an additional $49.6 million of refunding bonds maturing serially from 2011 to 2019.
That will allow the agency to refinance its 2004A variable-rate bonds and terminate a swap with Citigroup Financial Products Inc. at an estimated cost of $8 million.
Market conditions permitting, $17 million of Series 2010B bonds, also maturing 2011-2019, would be issued to refund bonds sold in 2000 for an estimated present value savings of about $1 million.
The bonds are rated A-minus by Fitch Ratings, A3 by Moody’s Investors Service, and A by Standard & Poor’s.
All three agencies affirmed their ratings on the authority’s $913 million of outstanding debt. Moody’s and Standard & Poor’s put stable outlooks on the bonds while Fitch assigned a positive outlook.
Bond insurance will be considered when the deal is pricing.
Although analysts have a negative outlook in general on the U.S. toll road industry, Fitch placed a positive outlook on its rating for the Miami-Dade expressway system, also known as MDX.
“The positive outlook reflects MDX’s encouraging financial performance over the past two fiscal years during weak economic conditions that have negatively impacted other toll facilities,” a report by Fitch analyst Chad Lewis said.
According to a study by Wilbur Smith Associates, MDX toll revenues declined 2.4% in fiscal 2008 and 2.3% in 2009. Fitch said another drop is anticipated in 2010 but MDX’s declining revenue has been at a lesser pace than experienced by other toll agencies.
Debt service coverage in 2008 and 2009 was a “robust” 1.9 times and 1.7 times, respectively, while 2010 is expected to be lower at 1.45 times due to toll revenue declines, expenses, and debt service growth, Fitch said.
MDX hasn’t lost a significant amount of traffic during the recession like many other toll road agencies, Schafer said, and South Florida’s population is relatively stable.
In an investor call last Thursday, Shafer said: “We did get a lot of participation from large institutional investors. We haven’t been in the market in a long time, but I think the rating agencies had some positive reports regarding the strength of the agency and I think we manage debt appropriately.”
MDX was created in 1994. Its five expressways cover 33.7 miles but tolls are not collected on 45% of the system. Except for two small segments, the entire system will collect tolls by the time open-road tolling is completed at the end of fiscal 2014.
Citi is running the book for this week’s sale Others in the syndicate are Bank of America Merrill Lynch, JPMorgan, Morgan Keegan & Co., Morgan Stanley, Raymond James & Associates Inc., Sterne, Agee & Leach Inc., Rice Financial Products Co., and Siebert Brandford Shank & Co.
First Southwest Co. is financial adviser. Greenberg Traurig PA and Edwards & Associates PA are co-bond counsel. Underwriters’ counsel is Squire, Sanders & Dempsey LLP.