DALLAS —The North Texas Tollway Authority achieved total savings of $10.1 million in a $268.6 million refunding deal that sold out in less than three hours, officials said.
Proceeds of the sale will refund $175 million of subseries 2008E-2 bonds with a Jan. 1 mandatory put date.
The offering also refunded 1997A and 1998 bonds for a net present-value savings of $7.4 million or 7.81%, according to the NTTA.
With maturities running from 2019 to 2038, the revenue refunding bonds were rated A-minus by Standard & Poor’s and A2 by Moody’s Investors Service, both with stable outlooks. Fitch Ratings did not rate the deal.
The initial yield on bonds maturing in 2038 with 5% coupons was 4.575%.
The deal was led by Siebert Brandford Shank & Co. with 55% participation. Morgan Stanley, Estrada Hinojosa & Co. and First Southwest Co. were co-managers.
The oversubscribed offering surpassed the tollway authority’s expectations, according to chief financial officer Janice Davis.
“Tuesday’s outcome shows that the NTTA is still well respected in the market, despite the size of the debt portfolio,” she said.
After issuing bond anticipation notes to start the $3.5 billion Sam Rayburn Tollway in 2007, the turmoil in the long-term municipal bond markets made it extremely difficult to refund them.
The NTTA used put bonds to reduce the overall rate on the debt used to refinance the Bans.
During 2008, approximately $1.3 billion of put bonds were issued.
At the mandatory put dates, the bonds needed to be refinanced into either long-term fixed-rate bonds or into some other mode, or else the rate would have escalated to 12%.
Meanwhile, the 2010 and 2011 put bonds were refunded with fixed-rate tax-exempt debt.
Earlier this month, the NTTA issued $641 million of special projects revenue bonds for the Chisholm Trail Parkway in Tarrant and Johnson counties. That deal, backed by a separate lien from the authority’s main toll system, was also oversubscribed.
The sale included $73.7 million of taxable bonds with yields ranging from 3.269% to 3.869%, and $566.9 million of tax-exempt bonds with yields that ranged from 2.59% on the 2019 maturities to 4.24% on the 2032 maturities.
In April, the NTTA issued $800 million of bonds and $500 million of notes for another special project, State Highway 161 west of Dallas.