New York's Triborough Bridge and Tunnel Authority, a credit of the Metropolitan Transportation Authority, is gearing up to sell $1 billion of revenue bonds tomorrow to help support capital projects on the system's bridges and tunnels.

The transaction will consist of two series, 2008C senior revenue bonds for $650 million, and 2008D subordinate bonds for $350 million. The larger portion will refund the system's commercial paper program while the authority may use the smaller, subordinate bond proceeds to refund previous debt and/or generate new money for needed infrastructure projects.

Vinay Dayal, the MTA's acting finance director said officials have yet to decide whether to use the $350 million for refunding prior fixed-rate bonds, auction-rate securities, or use the proceeds for new-money projects.

"We could be looking at auctions, they're part of the mix that we could be doing, but it always hinges on the economics," Dayal said.

Citi and Banc of America Securities LLC are co-senior managers on both series. Goldman, Sachs & Co is financial adviser to the authority and Hawkins, Delafield & Wood LLP is bond counsel. Dayal said the authority has yet to determine whether to insure the transaction.

"The state of the industry is pretty tenuous and in a state of disarray so it would have to be valuable for us to be able to insure," Dayal said.

Standard & Poor's and Moody's Investors Service assign the TBTA's $5.8 billion of senior-lien bonds AA-minus and Aa2, respectively. Fitch Ratings assigns its AA rating to the credit. The authority's $2.1 billion of outstanding subordinate bonds carry A-plus and AA-minus ratings from Standard & Poor's and Fitch. Moody's rates the subordinate debt Aa3.

Ratings had not yet been assigned to the new bonds as of yesterday afternoon.

Current plans call for the Series 2008C and 2008D to be 30-year, fixed-rate bonds with serial and term maturities, although market conditions could change that and also influence the pricing date.

"We are, on an overall basis, looking at a traditional, fixed-rate level debt structure," Dayal said. "We're not looking at anything exotic, but obviously we reserve the right, as we move closer, to anything that makes economic sense."

The authority anticipates receiving $1.3 billion of bridge and tunnel revenue in 2008, up slightly from the $1.25 billion of revenue the TBTA generated in 2007, according to the preliminary official statement for the 2008C and 2008D bonds.

The TBTA is a public benefit corporation within the MTA system and oversees seven bridges and two tunnels, including the Triborough Bridge and the Queens Midtown Tunnel.

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