New York’s Metropolitan Transportation Authority plans to competitively price $347 million of Triborough Bridge and Tunnel Authority bonds Wednesday.

The bonds will be offered in two series: $66.6 million of tax-exempts and $280.4 million of taxable Build America Bonds. The MTA plans to use the proceeds to finance capital projects for the system’s bridges and tunnels and to fix out bond anticipation notes issued in 2009.

Tax-exempt bonds will have serial maturities up to 10 years and the BABs will have serial maturities ranging from 2021 to 2040, according to the preliminary official statement.

Hawkins Delafield & Wood LLP is bond counsel and Lamont Financial Services Corp. is financial adviser.

The notice of sale includes bid parameters that the underwriter adhere to a 102% maximum reoffering price on the BABs. Such language is one way issuers ensure tax law compliance by requiring that the premium on BABs is no more than a de minimis amount.

The TBTA is one of four credits through which the MTA sells bonds. The debt is backed by a senior lien on toll revenue from seven bridges and two tunnels in the New York City metropolitan area. The MTA board will consider two proposals  to increase toll yields by 7.5% at its board meeting next week.

One proposal would raise tolls on both cash customers and EZPass customers. The other would leave EZPass tolls as they were and only raise tolls on cash customers because cash transactions cost the authority more.

Earlier this month the board approved fare increases on its subway, bus and commuter rail systems.

MTA Bridges and Tunnels, the administrative unit within the authority that operates the bridge and tunnel system, generates surpluses that subsidize other expenses.

Bridge and tunnels generated $1.35 billion of revenue in 2009 with expenses of $397.8 million. The revenue provided 2.64 times debt service coverage.

Revenues are projected to rise to $1.42 billion this year with expenses increasing to $410 million. Growing debt-service costs will reduce coverage to a projected 2.27 times, according to the preliminary official statement.

The MTA had $6.82 billion of TBTA senior-lien bonds and $1.93 billion of TBTA subordinate lien bonds outstanding in September.

Standard & Poor’s analyst Joseph Pezzimenti said Friday the system was strong.

“It has historically been able to generate relatively strong margins,” he said. “One of the offsetting things is that they do have to make transfers to the MTA, but that’s after meeting all of the requirements under the bond documents.”

Traffic in the first eight months of 2010 was flat, down 0.1% but toll revenue increased by 9.4% due to a toll increase last year, according to Standard & Poor’s report.

Standard & Poor’s rates TBTA senior-lien bonds AA-minus with a stable outlook. Moody’s Investors Service rates them Aa2 with a negative outlook and Fitch Ratings rates them AA with a negative outlook.

After this sale, the MTA has only one more issue scheduled for the year: $765 million of bonds to take out commercial paper in November. The authority expects to sell $1.64 billion of bonds in 2011. 

Republican gubernatorial candidate Carl Paladino last week said that if elected he would abolish the MTA and transform it into a department under the governor’s direct control, according to a report in the New York Daily News. He has also called for an end to tolls on the Verrazano-Narrows Bridge, which is part of the system and connects Staten Island to Brooklyn.

Paladino trailed Democratic rival ­Andrew Cuomo, 37% to 55%, among likely voters in an Oct. 7, 2010 poll ­Quinnipiac University Poll.

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