DALLAS — After issuing a state-record $3.5 billion of bond anticipation notes to pay a state agency for the right to build one toll road, the North Texas Tollway Authority is working to make a Dec. 21 deadline for an agreement to build another. The two projects — State Highways 121 and 161 — are linked physically and financially in the NTTA’s overall transportation plan for the Dallas-Fort Worth area. SH 121, traversing the northern Dallas suburbs in Collin and Denton counties, is moving toward ground-breaking after the NTTA raised the $3.3 billion in up-front payments that must be delivered to the North Texas Regional Transportation Council by Dec. 1. The up-front payment comes from last week’s sale of Bans through Lehman Brothers, Bear, Stearns & Co., and Citi at 4.125%, maturing Nov. 19, 2008, and callable March 3. As part of a deal that in effect allows the NTTA to function as a concessionaire, proceeds from the Ban sale will be paid to the RTC for the right to do the SH 121 project. The RTC can then use the money to finance other construction projects. One of those projects might be SH 161, if the NTTA cannot reach agreement with the Texas Department of Transportation to build the project as a toll road. SH 161, running north and south, will serve as an extension of the NTTA’s President George Bush Turnpike, which arcs through the northern suburbs of Dallas, then heads south through the western suburbs. The highway, whose construction is already underway, will serve as a major thoroughfare for traffic headed toward the Dallas Cowboys new stadium scheduled to open in Arlington in 2009. Future travelers on SH 121 will be able to connect to the Bush Turnpike via the Dallas North Tollway. If NTTA does not win the right to build SH 161 as a tollway, the Texas Department of Transportation has said the project must be built as a freeway. Ric Williamson, chairman of the Texas Transportation Commission that oversees TxDOT, gave NTTA a Dec. 21 deadline to reach agreement with regional TxDOT engineers on how to value the tollway. Under recently passed Texas law, a market valuation must be conducted before a highway can be built as a tollway. Because of urgent needs for the highway and a court case requiring a commitment to build it as soon as possible, TxDOT would have to finance the project from about $600 million of the $3.3 billion that the NTTA provided the RTC in up-front payments. “It happens to be a corridor we have to build right away,” said Michael Morris, executive director of the RTC who is serving as mediator between the NTTA and TxDOT. “We’ve got a federal interest that that project be built.” If agreement is not reached, “we have 90% of the engineering plans ready and are ready to proceed as early as next summer,” said TxDOT spokesman Bill Compton. The NTTA’s payment to the TTC was the second-largest concession payment on a toll road in U.S. history. Indiana received $3.8 billion from a private firm for a 75-year lease to collect tolls on the Indiana Toll Road. The NTTA expects to take out the Bans with long-term bonds next year. In launching the deal and more than tripling its debt, the authority took a hit in its ratings, with downgrades from all three ratings agencies. Fitch Ratings kept the NTTA on rating watch negative after downgrading the authority to A-minus from A-plus. Standard & Poor’s also kept the credit on negative watch after lowering the rating to A from A-plus. Moody’s Investors Service took the rating down to A2 with a stable outlook from A1.
Independent and authoritative analysis and perspective for the bond buying industry.
No credit card required. Complete access to articles, breaking news and industry data.
Have an account? Sign In