DALLAS - With a deadline less than a month away, the North Texas Tollway Authority managed to complete the takeout of $3.5 billion of bond anticipation notes with the sale of $425 million of revenue bonds last week.

Had the market not cooperated, the NTTA was prepared to issue another round of Bans to refund last year's notes due Nov. 19. As it turned out, the market was so receptive that the NTTA increased the amount of the sale from the $300 million needed to refund the notes to $425 million, with the extra money going to existing projects.

Officials said the window of opportunity in the turbulent market opened Thursday. Buyers earned an average yield of 5.99% on the bonds backed by system toll revenues maturing in 2038. The deal came in four series, including two with a mandatory put feature and one tranche insured by Assured Guaranty Corp.

"Given the unprecedented market volatility, it's a real credit to the NTTA for having moved quickly to position this transaction for pricing at the first possible market opportunity," said Jamison Feheley, director with Citi, the book-running senior manager on the issue. "The success of this transaction during these turbulent times demonstrates the market's confidence in the authority's board and management. In a market currently dominated by high-grade credits, the success of this transaction was a breakthrough for an intermediate credit and will hopefully lead the way for other issuers to follow."

The bonds had underlying ratings of A2 from Moody's Investors Service and A-minus from Standard & Poor's.

Barclays Capital Inc. was the senior co-manager. Others in the deal included Estrada Hinojosa & Co., First Southwest Co., Morgan Keegan & Co., M.R. Beal & Co., Southwest Securities, and Wachovia Bank NA.

RBC Capital Markets is the NTTA's financial adviser and their subcontractor is TKG & Associates. McCall, Parkhurst & Horton LLP and Simmons Mahomes PC are co-bond counsel.

The Bans were issued last year to raise cash for an upfront payment to the Texas Department of Transportation for the right to develop State Highway 121 north of Dallas as a tollway. The need to triple NTTA's debt for the project led to a one-notch downgrade from Standard & Poor's to A-minus on the first-tier bonds. The market turmoil that ensued from the subprime crisis and the decline of monoline insurers made subsequent bond issues increasingly troublesome.

Despite the financial challenges, the NTTA this month agreed to accept another major toll project, the 11.5-mile State Highway 161 project valued at $1.3 billion. In order to finance that project, the authority accepted loan guarantees from TxDOT for the stand-alone project whose debt will not share backing from other tollway revenues. Up till now, the NTTA's bonds have been backed by revenues from the growing toll system that includes a network of roads and bridges.

"Over the course of the last year, NTTA has not only completed long term SH 121 financing but positioned itself financially to advance other North Texas projects," said Paul N. Wageman, chairman of the NTTA board of directors. "SH 121 funds have already been put to work to advance a multitude of projects in the region."

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