DALLAS -- The North Texas Tollway Authority has approved a three-way agreement to provide nearly $300 million for an extension of Texas 360, a major highway that bisects the Mid-Cities of the Dallas-Fort Worth region.
The NTTA board approved the memorandum of understanding Feb. 19. The MOU still requires approval from the Texas Transportation Commission that governs the Texas Department of Transportation. The third party to the agreement is the North Central Texas Council of Governments, which distributes federal funding for highway projects in the region.
With a projected cost of $600 million, the agreement allows TxDOT to lend $294 million to the NTTA to extend the highway south of Interstate 20 as a public-private tollway.
Highway 360 links Interstates 20 and 30 and the Dallas-Fort Worth International Airport but dwindles to a frontage road in southern Tarrant and northern Ellis counties.
The new tollway would connect Highway 360 to U.S. Highway 287 to the south, adding a corridor for southern Tarrant County. The toll road would be four lanes wide for most of its length before turning into two lanes in the town of Mansfield.
Under the agreement, TxDOT would finance, design and build the project before turning the roadway over to NTTA. Toll revenues would reimburse TxDOT and pay for maintenance and operations.
Toll revenue beyond that would be split between TxDOT and NTTA, possibly for use on other projects.
The MOU must be approved by all parties by the end of March. Once approved, NTTA anticipates the extension of SH 360 will be completed in 2018.
NTTA operates toll roads in North Texas and is nearing completion of its first toll road in Tarrant County, which includes Fort Worth. The Chisholm Parkway in Fort Worth is expected to be dedicated in May.
With ratings of A-minus from Standard & Poor's and A2 from Moody's Investors Service on its first-tier revenue bonds, NTTA is planning to refund $100 million of 2011 bonds.
The agency has $6.1 billion of outstanding first tier debt and $1 billion of second tier debt outstanding, according to Moody's. The second-tier bonds are rated BBB-plus by S&P and A3 by Moody's with stable outlooks.
NTTA's $400 million of deeply subordinated Capital Improvement Fund debt is rated Baa3 by Moody's.
The authority has swaps worth $178 million with Citibank and JPMorgan Chase Bank as counterparties, according to S&P. The swaps create a synthetic fixed rate when combined with floating-rate debt. The swaps had a negative fair market value of $42.3 million as of Dec. 31, 2012, meaning the authority would owe a payment to the swap providers if the swaps were canceled.
The authority is not currently required to post collateral on the swaps. However, if the authority's senior debt is downgraded below A-minus by S&P, or A3 by Moody's, the authority would be required to post collateral. In addition, the swap can be terminated if the authority's rating is lowered below investment grade.
To protect its standalone credit rating, NTTA created a separate lien for the Tarrant County tollways called the Special Projects System. The debt for those projects is backed by TxDOT and carries the ratings of the Texas Transportation Commission. The Texas 360 project would be included in the special projects.
