The Central Texas Regional Mobility Authority met strong demand Tuesday for $510 million of bonds and notes for its 183 North managed lanes project.
“The issue was exceptionally received,” said Richard Ramirez, managing director at municipal advisor Hilltop Securities. “It was approximately 20 times oversubscribed with over $10 billion in orders."
The deal included nearly $265 million of revenue bonds maturing in series through 2051 and $245 million of subordinate lien bond anticipation notes maturing in five years.
Combined true interest cost was 2.806%. The TIC on Series 2021B senior bonds was 3.13%. Series 2021C subordinate lien five-year bond anticipation notes came in with a TIC of 1.79%.
“We’ve always done well in the market, but I think this is the best response we’ve ever had,” said Bill Chapman, chief financial officer and interim chief executive at CTRMA.
The bonds are rated Baa1 by Moody’s Investors Service with a stable outlook and A-minus with a negative outlook from S&P Global Ratings.
CTRMA expects to take out the BANs with a federal Transportation Infrastructure Finance and Innovation Act, or TIFIA, loan.
Chapman said toll revenues are recovering from the pandemic at a stronger pace than some anticipated.
“Except for the snowstorm, the roads were really recovering quite well,” he said. “Several of them were above where we were in 2019.”
In June, Chapman will turn over his role as interim chief executive to James Bass, currently executive director of the Texas Department of Transportation.
Bass, who has worked for TxDOT since 1985, has overseen more than 196,000 lane miles of roads, while supporting aviation, rail, maritime and public transportation across the state.
The $612 million 183 North project will add nine miles of managed lanes to an existing Texas Department of Transportation highway through west Austin.
CTRMA has about $2.56 billion of debt outstanding, which includes senior-lien debt totaling $1.47 billion and subordinate-lien and TIFIA debt totaling $1.09 billion. At fiscal year-end 2020, unrestricted cash and investments totaled about $121.7 million, equal to about 1,172 days' cash and 6.8% liquidity to debt.
CTRMA owns and operates a toll-road system in the Austin area that includes 183A phase I and II, 290 East, SH 71 East, SH 45 Southwest, 183 South, and 290E phase III, which are all operational, and 183A phase III and 183 North, which are starting construction and expected to be open for tolling in 2025 and 2026, respectively.
The authority has a track record of completing roads to enhance and expand the system adding additional diversity to the system, S&P noted.
“The negative outlook reflects significant expansion projects at varying stages of completion or ramp-up and new expansion projects starting during a time of increased volatility in transactions and revenue as a result of the pandemic,” S&P analyst Todd Spence wrote in a March 10 report. “Additionally, the rating reflects our view that the authority will proceed with planned expansion projects and that construction will generally proceed on schedule and within budget.”
