Illinois Tollway sells $500m of US-subsidized BABs at net 3.44%, 4.02%

Illinois Tollway this week sold $500m of the Build America Bonds created by the US Government as part of economic "stimulus" efforts. They were 15 and 25 year maturities and were issued at 5.293% for the 2024 securities and 6.184% for the 2035 securities.

Allowing for the standard US BAB subsidy of 35% of interest costs these work out as costing the Tollway 3.44% and 4.02%.

The money will go towards the Tollway's 10-year $6,300m Congestion Relief capital program, which involves 20 open road toll plazas, extension of I-355, third and fourth laning to add capacity, interchange rebuilds, and pavement reconstruction.

Illinois Tollway becomes the second major tollroad to take advantage of BABs, available only to public toll agencies. New Jersey Turnpike Authority was the first selling $1,375m of 30 year BABs.  NJTA is paying 7.41% gross and  4.82% after the USG subsidy.

on NJ: http://www.tollroadsnews.com/node/4118

TOLLROADSnews 2009-05-13