The North Texas Tollway Authority achieved record savings on $850 million of toll revenue refunding bonds, said Chief Financial Officer Horatio Porter.
“It was extremely successful,” Porter said of the Wednesday pricing, crediting underwriters and financial advisor Hilltop Securities for attracting more than 100 investors to the deal.
“With over $7.3 billion in orders, we were 8.5 times oversubscribed,” he said. “Our net present value savings were $191.5 million or a record setting 29%. Our previous high was 26% in 2019.”
The deal included $402.9 million of taxable, first-tier revenue bonds reaching final maturity in 2043 and $448.8 million of tax-exempt second tier revenue bonds maturing in 2051.
The first-tier bonds are rated A1 by Moody’s Investors Service and A-plus by S&P Global Ratings.
Second-tier bonds are rated a notch lower at A2 by Moody’s and A by S&P. Outlooks on both series are stable after S&P revised its outlook from negative ahead of this deal.
Demand was strong across the entire yield curve, Porter said.
“That allowed us to make significant price adjustments,” he said. “We were able to tighten some spreads by as much as 25 basis points.”
Porter will present the results to the NTTA board on May 19. The savings come as NTTA is experiencing a strong rebound from the pandemic valley of 2020.
“We’ve successfully refinanced over $8.4 billion, delivering measurable interest savings,” he said. “We have a sizable debt obligation. However, with these savings, we believe we are well positioned to continue serving our customers and meeting the transportation needs of our growing region.”
RBC Capital Markets, led by managing director Karl Hummel, was book-runner on the taxable Series A, while JPMorgan, led by executive director Marshall Kitain, managed the Series B.
Richard Ramirez, managing director at Hilltop Securities, is financial advisor.
The first-tier bonds refund bonds issued in 2008 and 2014 for interest savings.
The second-tier bond proceeds will refund the Texas Department of Transportation loan for the 360 Tollway and transfer that asset to the NTTA system. The issue will also take out $200 million of commercial paper.
The 360 Tollway is a 9.7-mile toll road between Tarrant and Ellis counties. Built as a public/public partnership between TxDoT and NTTA, it opened to traffic on May 11, 2018.
“Like our 2017 transaction that brought non-system assets into the system, this refunding will also bring 360T into the system,” Porter said. “Otherwise, this is very similar to our prior refundings where the goal was to achieve debt service savings.”
