The Colorado Bridge and Tunnel Enterprise sold $150 million in bonds to finance improvements to bridges on its interstate highways.
The bonds mature between 2041 and 2054, yielding between 3.78% and 4.18%. They received an insured rating of AA from S&P Global Ratings and A1 from Moody’s Investors Service, which assigned a stable outlook. S&P assigned an underlying rating of A- and Moody’s assigned an underlying rating of A2.
The enterprise is authorized to collect a bridge safety surcharge on all vehicle registrations in Colorado under legislation known as the Funding Advancements for Surface Transportation and Economic Recovery (FASTER) Act. The charges are between $13 and $32 depending on weight of the vehicle.
The bonds are special, limited obligations of the enterprise, secured by the surcharge. The enterprise collected $102 million in surcharge fees last fiscal year.
“The stable outlook reflects the expectation that FASTER bridge surcharge revenue will remain relatively stable and provide adequate debt service coverage on all obligations,” Moody’s analysts wrote.
The Colorado Bridge and Tunnel Enterprise is a government-owned business within the Colorado Department of Transportation. It is tasked with repairing, operating, and maintaining “poor-rated” bridges within the state.
The Series 2024 bonds will fund improvements to bridges on Interstate-70, which runs east-west across northern Colorado, and Interstate-25, which runs north-south. The highways cross in Denver.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $165 million. The price reflected a premium of $15 million. Stifel, Nicolaus & Company, Inc acted as municipal advisor.