Capital markets support Dallas TX's N Tarrant toll lanes - Cintra sells 30yr PAB bonds @ 7%

December 14, 2009
By Peter Samuel

Good news from the North Tarrant Express (NTE) toll project in the Dallas TX area. The Cintra-led concession on the toll lanes project on the west side of Dallas Ft Worth International Airport say they have easily raised $400m in longterm fixed rate bonds, and without any insurance or "wrap" as finance jargon has it. The offering was oversubscribed 2.4 times on an average yield of 7%.

That's a premium of 2.5% points over the 30 year US Treasury bond at present.

The $400m is split into:

- $340m at 6.87% maturing end 2039 (30 years)

- $60m at 7.5% maturing end 2031 (22 years)

The transaction occurred in the Wall Street municipals since the bonds were 'private activity bonds' that are tax-free like those of public toll authorities.

A bank syndicate led by JP Morgan and Merrill Lynch underwrote the bond issue. The NTE consortium is 57% Cintra, Meridiam 33%, Dallas Police & Fire Pension 10%.

Cintra will be the operators of 21.4km (13.3mi) project that will cost some $2b total. NTE Mobility partners, the Cintra-led concession is commited to coming up with $1.6b. TxDOT will commit up to $600m in gas tax money.

Cintra and partners won a concession earlier this year from TxDOT for 52 years for the construction, tolling, and operations.

Cintra CEO Enrique Diaz-Rato says:

"Completion of this portion of the financing is a success for a number of reasons. It is the first time that unwrapped Private Activity Bonds have been used for a private roadway concession in the United States, and it is the first bond issue for an explicit-toll concession since the global financial challenges began. It is also the first time in the United States that a US pension fund has come on board as a direct equity shareholder of a road concession." 


TOLLROADSnews 2009-12-14

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