New tax backs deal for Indianapolis transit
The Indianapolis mass transit system is set to price the first round of bonds to finance projects under the system’s $522 million, five-year capital plan.
Indianapolis Public Transportation Corporation, marketed to riders as IndyGo, will bring $26 million of local income tax revenue bonds Nov. 8. They are selling through the city's borrowing arm — the Indianapolis Local Public Improvement Bond Bank.
Bond proceeds will fund some of the costs tied to improving and extending the transit system’s service areas as well as buying 16 new buses to replace old buses.
The bonds are limited obligations of the bond bank and are secured by a .25% local income tax approved by Marion County voters two years ago. It took effect in October 2017. The five-year capital plan calls for an additional $99 million in bonds to be issued through 2022. The plan is being funded through a mix of local and federal funds and borrowing.
The bonds are described on the Indianapolis bond bank's investor relations website.
Stifel, Nicolaus & Co. Inc. is the senior manager and the Williams Capital Group LP is the co-manager. Crowe LLP is the municipal advisor.
The bonds are rated AA-minus by S&P Global Ratings, according to the preliminary offering statement. IndyGo currently has no debt.
Marion County transit income tax revenue is expected to generate more than $54 million annually. All of the transit income tax revenue is irrevocably pledged to IndyGo for the payment of the bonds.
IndyGo’s 2018-2022 capital plan, which the agency’s board approved in December, includes construction of the Red, Purple and Blue bus rapid-transit lines, plus the cost of new buses, facilities and equipment.