A rare Midwest high-grade visitor to the municipal bond market will return Tuesday.
The Missouri Highways and Transportation Commission will competitively sell $91 million for bridge projects, its first deal in two years.
The agency expects to return to the market with a $500 million sale but not until 2023, said Department of Transportation Chief Financial Officer Brenda Morris.
Ahead of the sale Fitch Ratings and S&P Global Ratings affirmed the commission’s AA-plus ratings on its third lien road bonds. Moody’s Investors Service affirmed its Aa1 rating. All assign stable outlooks.
The bonds are secured by state road funds after payment of the senior and second lien debt but they also carry their own unique security structure put in place for $300 million of bridge borrowing. The state pledged to annually appropriate funds for debt service under 2019 legislation.
“The pandemic significantly affected Missouri's economy in 1H20, but the state's recovery has since progressed apace,” Fitch said in support of the rating.
The commission received a boost this year with legislative passage of its first motor fuel tax in 25 years. New funding would go to chip away at the a “High Priority Unfunded Needs” list.
"Regardless of where the money comes from these are identified high-priority needs,” Morris said.
The tax could generate nearly $400 million more for the state in the coming years. The state would phase in the 12.5 cent-per-gallon increase by 2.5 cents annually beginning this fall and continuing through 2025, but motorists can seek a refund from the additional tax.
