The Metropolitan Atlanta Rapid Transit Authority (MARTA) sold $313.9 million in bonds to finance capital improvements and refund previously issued securities.
MARTA issued the bonds in two series. The Series 2024A bonds, consisting of $110.5 million, mature between 2033 and 2037, yielding between 2.8% and 3.01%. The Series 2024B bonds, consisting of $203.4 million, mature between 2025 and 2045, yielding between 2.73% and 3.62%. All of the bonds pay interest at 5%. The securities received a rating of AAA from S&P Global Ratings and AAA from Kroll Bond Rating Agency.
“The rating reflects our view of MARTA’s broad and diverse local economy, pledged revenue source with relatively low volatility, very strong coverage and liquidity, and linkage that we view as having a limited relationship to the obligor’s creditworthiness,” S&P analyst Kayla Smith said in a press release.
MARTA operates buses and subways in the Atlanta metropolitan area. The authority’s ridership still lags pre-COVID levels, with half as many riders using the system as in 2019. Analysts say depressed ridership could raise financing costs for MARTA’s debt, despite the authority’s AAA bond rating.
The Series 2024A proceeds will fund capital improvement projects, such as rail car replacement and the procurement of electric buses. MARTA will use the Series 2024B proceeds to purchase a collection of outstanding bonds it sold between 2015 and 2021.
The bonds are limited obligations of MARTA, payable by a retail sales and use tax collected in Atlanta and its surrounding counties, as well as some vehicle taxes from the same area.
Jefferies LLC served as lead underwriter on the issuance, purchasing the bonds for $362.2 million. The price reflected a premium of $49.2 million and a discount of $900,000. PFM Financial Advisors LLC acted as financial advisor.