CHICAGO -- A new two-year transportation bill that authorizes the issuance of $1.5 billion of Ohio Turnpike-backed bonds is on its way to Gov. John Kasich’s desk after legislators approved a final version last week.

Kasich is expected to sign the measure. The 2014-2015 transportation budget totals $7.6 billion. Its central feature is Kasich’s proposal that the state create a new Ohio turnpike credit to issue $1.5 billion of bonds for new transportation projects across the state.

Bond proceeds will also be used to leverage an additional $1.5 billion in federal transportation funding, according to the state.

The bill includes a provision that mandates that 90% of the proceeds be spent on projects in the northern part of the state, where the 241-mile toll road is located.

The state expects to enter the market with the first tranche of the debt -- expected to be around $1.1 billion -- by the third quarter. The newly renamed Ohio Turnpike and Infrastructure Commission began issuing requests for qualifications for a finance team in late February.

The new credit would feature a junior lien trust agreement that would allow the commission to issue bonds against future toll revenue projections. Currently it is restricted to issuing bonds with coverage levels tied to historic revenues.

The bonds would be subordinate to the commission’s existing $556 million of debt.

Fitch Ratings rates the turnpike AA and Moody’s Investors Service rates it Aa3, putting it among the top-rated turnpikes in the country.

House Bill 51 also includes the creation of a new legislative tax force to review the transportation department’s funding needs.

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