DALLAS — Colorado’s Northwest Parkway Public Highway Authority has agreed to a long-term lease of the financially troubled toll project, but terms of the deal will not be disclosed until Thursday, officials said.
Portuguese developer Brisa Auto-Estradas de Portugal/Companhia de Concessoes Rodovaiarais will defease the authority’s $503 million debt, but the length of the lease agreement will be revealed after the company has notified stock exchanges in Portugal and Brazil.
“The time difference between Colorado, Portugal and Brazil prevents Brisa/CCR from notifying shareholders until Thursday morning, local time,” said authority spokesman Brian Rantala.
Before yesterday’s meeting, some reports said the lease could last up to 75 years.
Brisa’s deal could leave the authority holding about $80 million in non-bond debt.
The unresolved debt includes $30 million owed to several partners in the suburban toll project, with $13 million claimed by the city of Broomfield northwest of Denver. If Broomfield submits that debt, the parkway authority board would have several options for resolving the matter, including a lien on the toll project that could be satisfied when the parkway reverts to the authority’s control.
Under terms of the deal, the authority will make its last debt service payment of $7 million on June 15 as scheduled.
Brisa builds and manages toll roads, primarily in Portugal and Spain, with some operations in Brazil. The company came out ahead of 10 others seeking to lease and operate the Northwest Parkway.
After the parkway authority announced its negotiations with Brisa on April 10, Standard & Poor’s affirmed its B-minus underlying rating on the authority’s series 2001A-C senior bonds and its CCC rating on the authority’s 2001D subordinate bonds. The outlook remained negative.
Moody’s Investors Service downgraded the authority’s $364 million of senior revenue bonds from Baa3 to B1 in December 2005. Fitch Ratings downgraded the senior debt series 2001A, 2001B and 2001C last year to CCC-plus from BB-minus and maintained a negative outlook.
The parkway’s senior revenue bonds are insured by Ambac Assurance Corporation and Financial Security Assurance.
The 11-mile parkway opened to traffic in November 2003 with revenue expected to come in at 1.4 times debt service. However, traffic was slower than predicted, with toll revenue of $6.8 million in 2006, 39% of original forecasts.
While debt service is scheduled to increase 15% per year after 2007, annual toll revenue is only expected to grow 13% this year, according to Standard & Poor’s.
After Brisa begins operating the toll road, Northwest Parkway board of directors will continue oversight of the project, with annual reports to the Colorado General Assembly on operations and finances. However, the staff would probably be eliminated.
