The Northern Indiana Commuter Transportation District (NICTD) issued $143 million in bonds to finance public transit improvements connecting parts of Indiana with the city of Chicago.
The bonds mature between 2024 and 2054, yielding between 2.74% and 4.17%. They received a rating of A+ from S&P Global Ratings and A1 from Moody’s Investors Service.
“Governance is a key driver of this rating as it incorporates NICTD’s close governance and management links to the State of Indiana (Aaa stable), which mitigates to some degree the underlying operating risks associated with a transit enterprise,” Moody’s analysts wrote.
NICTD runs a commuter rail line connecting Chicago with cities in northern Indiana including Gary and South Bend. The bond proceeds will fund improvements to a track managed by NICTD in Chicago.
The district is planning significant upgrades this year that it expects will increase ridership to Chicago. The $650 million upgrade is aimed at restoring ridership—and the revenue it creates— to prepandemic levels. Half as many riders used NICTD trains last year as in 2019.
The bonds are limited obligations of the district, payable by a lien on the federal funds it receives. They are also backed by Indiana sales and use taxes.
BofA Securities, Inc served as underwriter on the issuance, purchasing the bonds for more than $157 million. The price reflected a premium of more than $14 million. Cender Dalton Municipal Advisors acted as financial advisor.