DALLAS — Metropolitan Washington Airports Authority will complete its funding of the $5.7 billion Silver Line rail project with next month's negotiated sale of $450 million of toll road revenue refunding bonds.
The MWAA board approved the bond sale at its April 16 meeting.
The $2.7 billion, 12-mile first phase of the 23-mile Silver Line project will extend from the current terminus of Washington Metrorail's Orange Line in Vienna, Va., to the Washington Dulles International Airport and eastern Loudon County, Va. The $2.9 billion, 11-mile second phase will take the Silver Line from East Falls Church, Va., to Reston, Va.
The Silver Line will be operated by Washington Metropolitan Area Transit Authority as part of the Metrorail system. Funding of the initial segment of the Silver Line includes a $900 million federal grant. MWAA expects to receive a $1.9 billion low-interest Transportation Infrastructure Finance and Innovation Act loan TIFIA loan for the second phase later this year.
Board chairman Frank M. Conner, 2nd said the bond sale will be a "significant milestone" for the Silver Line project. "Assuming our TIFIA loan application is successful, and we have every indication it will be, when these bonds are issued later this year the airports authority will have secured financing for the full amount of the project expected to be covered by tolls from the Dulles Toll Road," Conner said.
The bonds are scheduled for pricing during the first two weeks of May.
MWAA's senior-lien toll-road revenue bonds are rated A2 by Moody's Investors Service and A by Standard & Poor’s. The second lien debt is rated Baaa1 by Moody’s and BBB-plus by S&P.
JP Morgan Chase & Co. and Loop Capital Markets are senior underwriters for the refunding bonds.
Junior partners 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 Associates LLC.
MWAA issued $963 million of toll revenue bonds in August 2009 and another $324.6 million in May 2010 for the project. The authority took over control of the toll road from Washington to Dulles in 2008 under a 50-year agreement with the Virginia Department of Transportation. In exchange, the authority agreed to use a portion to the revenues to support the Silver Line project.
Dulles Transit Partners, the construction consortium building the Silver Line, said in February it had completed the first segment of the extension. However, MWAA said on Feb. 24 a review of the project found more work remained before passenger service could begin.
The contractors submitted a second declaration of substantial completion on April 9. The airport authority has until April 24 to determine if the segment can be turned over to WMATA for testing before revenue service can begin. The line could be operational by late summer, but MWAA officials said they are not sure when it will go into service.
The airport board awarded a $1.8 million contract Wednesday for repairs to the communications system that links Metrorail's central control center with train control equipment along the route.
The control problem was one of the 12 issues cited in MWAA's decision to delay the opening in February. The repairs will be a temporary fix until a permanent solution can be determined, MWAA said.
Michelle Michael, a spokeswoman for Bechtel Corp., the lead partner in the construction group, said these sort of delays are common with projects as complex as the Silver Line.
"We are working closely with MWAA to address outstanding matters as our focus is on successfully delivering this project," she said after Wednesday's board meeting.
Pat Nowakowski, executive director of the Dulles Corridor Metrorail Project, said Wednesday he will leave the project May 2 to take "a major leadership position at another transit organization."
Carol D. Kissal, Washington Metro's chief financial officer, is leaving. Kissal said her departure has been planned for months and is not related to a recent report by the Federal Transit Administration criticizing several questionable no-bid contracts.
