The Maryland Transportation Authority (MDTA) sold $622.8 million in bonds to restructure its debt.
The bonds mature between 2025 and 2043, yielding between 2.53% and 3.44%. They pay interest at 5%. The securities received a rating of Aa2 from Moody’s Investors Service and AA from Fitch Ratings.
“The rating reflects MDTA’s role as a vital system that provides diverse transportation links in the mid-Atlantic region, demonstrated traffic levels with resilience to economic conditions and a pricing framework that allows for a strong rate-making flexibility,” Fitch analysts wrote.
The MDTA will use the issuance proceeds to refund bonds it sold in 2009 and 2010, a step that will decrease its outstanding bond debt by $100 million. Prior to the issuance, the MDTA had $2.2 billion in bonded debt. Following the issuance and refunding, the authority will have $2.1 billion in bonds outstanding. “As a result of the refunding, MDTA will achieve a restructuring of its debt,” the official statement accompanying the sale of the bonds reads.
The MDTA is a state agency charged with running Maryland’s roads and highways, among other infrastructure. The authority collects revenue primarily via tolls. The bonds are limited obligations of the MDTA, payable by the authority’s revenue.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for more than $717 million. The price reflected a premium of $95 million and a discount of $1 million. PFM Financial Advisors LLC and People First Financial Advisors acted as municipal advisors.