BRADENTON, Fla. — Santa Rosa Bay Bridge Authority bondholders did not get paid July 1, according to the Florida agency’s trustee, Bank of New York Mellon.
The trustee said it had $2.09 million in the reserve account and $2.11 million in the interest account, which would not cover the payment of $5,009,687.50.
“It currently appears that gross revenues will be insufficient for the foreseeable future to continue to pay debt service on the bonds,” the trustee said in a notice. “At this time, as a result of the gross revenue shortfalls, the trustee will not be making the July 1, 2011, payment.”
Interviews are underway with potential financial advisers to explore options for bondholders “to enhance value for this transaction,” the trustee said.
Meanwhile, Moody’s Investors Service on Thursday downgraded the SRBBA’s bonds to Ca from Caa3 and the Florida Department of Transportation said it would not bail out bondholders.
The debt amounts to $116 million, including accretion on capital appreciation bonds.
Toll revenues on the 3.5-mile Garcon Point Bridge in Florida’s panhandle region secure the bonds. Traffic has never neared levels predicted by consultants when the bonds were sold in 1996. The toll bridge also has free nearby alternate roadways.
FDOT has an agreement to fund operations and maintenance through the life of the bonds.
“Moody’s is concerned that FDOT may have less incentive to continue to pay [operation and maintenance] if bondholders assert their rights to remedies in the bond indenture,” Moody’s analyst Maria Matesanz said in a report. “Resignations of the SRBBA board and cancellation of the board’s upcoming meeting further complicates any potential near term resolution of the authority’s distressed position.”
FDOT will continue to safely operate and maintain the bridge, which costs $1 million annually from the state transportation budget, according to department Secretary Ananth Prasad. “Make no mistake, we will not bail out this investment by the bondholders,” he said.
The bonds are payable from the bridge’s toll revenue and are not a general debt of the authority, Santa Rosa County, or the state, Prasad said .
“The bond documents clearly advised investors that neither the state of Florida nor Santa Rosa County would have any responsibility for payment of the bond debt,” he said.
Some bondholders have said they believed the state’s bond ratings would suffer if the default was allowed to occur.
The default is not expected to adversely affect the state’s ability to sell bonds or the interest rates on state financings, according to Ben Watkins, director of the Division of Bond Finance.
“It’s unfortunate that the financial performance has been significantly below the feasibility consultant’s projections and that the bonds are not being paid when due, but this should not impact the state,” Watkins said.
The Garcon Point Bridge opened to traffic in 1999 and spans across Pensacola/East Bay. The current toll is $3.75.