The South Carolina Transportation Infrastructure Bank expects to competitively sell today $93.6 million of revenue bonds to refund debt issued between 1998 and 2000.
The Series A bonds, which mature between one and eight years, are rated A1 by Moody’s Investors Service and A by Fitch Ratings. With this deal, the bank expects to save $3.7 million, or 3.8% of the refunded par amount, according to Moody’s.
The bank was created in 1997 to provide loans to the state, local governments, and private companies for transportation projects. It currently has $1.4 billion in projects under construction.
The bank’s main source of revenues, truck registration fees, has come under economic pressure amid the recession. Registration fees comprised almost half of the banks’ revenue in fiscal 2009.
The bank’s bonds have a junior lien on registration fees while the state’s highway general obligation bonds have the senior lien, but the state constitution limits the amount of debt that can be issued for highway bonds.
The bank expects to sell $450 million of debt for new projects by 2012, the first new-money debt it has issued since 2007.
With the additional debt, annual debt-service coverage would be 1.05 times in fiscal 2014 by actual fiscal 2009 revenues, according to Moody’s.
The bank, which includes projected revenues, calculates debt service to be 1.38 times.
The McNair Law Firm will be bond counsel and Hull, Towill, Norman, Barrett & Salley PC will be the issuer’s counsel. Public Financial Management Inc. will be financial adviser.