DALLAS - Metropolitan Washington Airports Authority accepted the first 12-mile segment of the $5.7 billion, 23-mile Silver Line train extension to Dulles Airport from the construction consortium.
The MWAA board agreed on Thursday that Dulles Transit Partners had met the conditions necessary for the system's major functional elements to be considered substantially complete.
"This achievement is remarkable given the complexity of building a rail line in a densely populated area where 700,000 cars travel each day," said Larry Melton, executive director of the project for Bechtel, the lead partner in Dulles Transit Partners.
Airports authority CEO Jack Potter said completion of construction on the first segment is a significant milestone for the rail line that will be operated by Washington Metropolitan Area Transit Authority. The Silver Line will be the first addition to the Washington Metro system in almost 38 years.
"We have conducted a thorough review of the contractor's submission and are satisfied that Phase 1 has met the contractual requirements that will allow the project to now move to the next steps in the process to begin passenger service," Potter said.
Passenger service on the segment is expected to begin later this year, following testing by Washington Metro.
MWAA is scheduled to issue about $447.7 million of toll road revenue refunding bonds in May to complete its portion of the funding for both phases of the Silver Line project.
The bonds are supported by revenues from the Dulles Toll Road, which is owned and operated by the airports authority. MWAA took over control of the toll road from Washington to the airport in 2008 under a 50-year agreement with the Virginia Department of Transportation.
The subordinate lien toll road revenue bonds are rated Baa1 by Moody's Investors Service and BBB-plus by Standard & Poor's.
The airports authority's senior lien debt is rated A2 by Moody's and A by S&P. The authority has $1.72 billion of rated revenue debt.
"Specifically, the ratings reflect our view of the authority's single-asset toll road that is highly leveraged with escalation debt service payments," said Standard & Poor's Dallas-based analyst Todd Spence
Standard & Poor's also is wary of potential cost overruns and delays on the second phase of the complex Silver Line project. Spence said.
JP Morgan Chase & Co. and Loop Capital Markets are senior underwriters for the refunding bonds.
Co-managers include Bank of America, BB&T Capital Markets, Fidelity Capital Markets, Goldman, Sachs & Co., Janney Montgomery Scott LLC, Morgan Stanley, Piper Jaffray & Co., RBC Capital Markets, and Siebert Brandford Shank & Co. LLC.
Nixon Peabody LLP is MWAA's bond counsel.
Financial advisors are Frasca Associates LLC and Mercator Advisors LLC.
MWAA issued $963 million of toll revenue bonds in August 2009 and another $342.6 million in May 2010 for the project.
JP Morgan Chase & Co. and Loop Capital Markets are senior underwriters for the refunding bonds.
Co-managers include Bank of America Merrill Lynch, BB&T Capital Markets, Fidelity Capital Markets, Goldman, Sachs & Co., Janney Montgomery Scott LLC, Morgan Stanley, Piper Jaffray & Co., RBC Capital Markets, and Siebert Brandford Shank & Co. LLC.
Nixon Peabody LLP is MWAA's bond counsel.
Financial advisors are Frasca Associates LLC and Mercator Advisors LLC.
MWAA issued $963 million of toll revenue bonds in August 2009 and another $342.6 million in May 2010 for the project.
The completed $2.7 billion first phase of the Silver Line connects to Metrorail's Orange Line in Falls Church, Va. It extends to the eastern edge of Reston, Va.
Work is under way the 11-mile, $2.9 billion second phase, which will connect the Metrorail system with Dulles International Airport and Loudoun County, Va. The final segment is expected to be completed in late 2018.
