DALLAS - The North Texas Tollway Authority Friday postponed plans to issue $1 billion of revenue bonds this week to take out notes used to finance a new toll project known as State Highway 121.

Citing market uncertainty and the holiday-shortened week, spokeswoman Sherita Coffelt said the NTTA would make a decision this week on when the bonds will sell.

The second-tier system revenue bonds carry ratings of BBB-plus from Standard & Poor's and A3from Moody's Investors Service. The NTTA dropped Fitch Ratings earlier this year when the agency downgraded its first-tier revenue bonds from A-minus to BBB-plus.

The authority's finance plan for the $5 billion SH 121 was premised on A-level ratings for its first-tier revenue bonds. The SH 121 bonds are backed by revenues from all of the NTTA's six tollways.

The agency is awaiting opinions from rating analysts before taking on another $1 billion of debt for another toll project, State Highway 161. The NTTA has indicated it might forgo the new tollway if the additional debt were to endanger its first-tier credit. Building SH 121 required a tripling of the authority's debt load to $4.9 billion.

After this week's deal, the NTTA plans to issue another $1 billion of senior-lien bonds to complete the take-out of its bond anticipation notes issued last year.

"Any significant additional parity senior-lien debt beyond the planned take-out financing of the Bans may result in a ratings downgrade, depending on the structure of the debt issuance and the expected associated revenues," warned Standard & Poor's credit analyst Laura Macdonald.

Lead underwriters on the week's deal are Lehman Brothers and Citi, with Estrada Hinojosa & Co., M.R. Beal & Co., First Southwest Co., Southwest Securities, Morgan Keegan & Co., and Wachovia Bank NA as co-managers.

RBC Capital Markets serves as financial adviser. McCall, Parkhurst & Horton and Simmons Mahomes are co-bond counsel on the deal.

The Series 2008F bonds are expected to carry maturities from 2030 to 2038.

The NTTA's overall finance plan for SH 121 envisions about $5 billion of bonds, including the $3 billion issued in March and April. However, the authority noted in its official statement that the financing plan may shift due to market conditions.

"Because of the recent volatility in the bond markets, it is not clear whether the authority will be able to issue the additional refunding bonds in the manner contemplated," the statement said, citing possible difficulty in obtaining bond insurance, liquidity enhancement, or interest-rate exchange counterparties on commercially reasonable terms. "As of the date hereof, the authority believes it would be able to utilize all fixed rate current interest bonds, if necessary."

In March, the NTTA priced $2.3 billion of revenue refunding bonds in four series with Bear, Stearns & Co. as the senior manager. Those bonds were the first take-out of the bond anticipation notes from 2007.

Yields ranged from 3.25% with a 4.5% coupon in 2010 to 6.00% with a 5.75% coupon in 2048. Bonds maturing in 2028 were insured by MBIA Insurance Corp., which is rated triple-A by Standard & Poor's and Moody's and AA-plus by Fitch. About $300 million of the NTTA's first-tier capital appreciation bonds maturing from 2028 through 2038 were insured by Assured Guaranty Corp., which retains triple-A ratings from all three agencies.


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