The North Carolina Turnpike Authority sold $182.8 million in bonds to refund previously issued securities.
The bonds mature between 2025 and 2041, yielding between 2.73% and 3.42%. They pay interest at 5%. The securities received a rating of AA+ from Fitch Ratings and Aa1 from Moody’s Investors Service.
The rating “incorporates the strong growth prospects and ample resilience of the HTF,” Fitch analysts wrote, referring to the state’s Highway Trust Fund.
The bonds are special obligations of the authority, secured by annual $24 million appropriations from the HTF. The bonds “reflect the strength of the pledged revenue stream,” according to Fitch.
The authority will use the issuance proceeds to achieve debt service savings by refunding bonds that it sold in 2010. The authority originally sold those bonds to fund improvements to an expressway section near Charlotte.
The bond sale is the latest fundraising effort for the turnpike authority. In February, the U.S. Department of Transportation approved a $417.2 million loan to the authority, which will use the proceeds to extend a major highway in the suburbs of Raleigh.
BofA Securities, Inc served as lead underwriter on the recent bond issuance, purchasing the bonds for almost $207 million. The price reflected a premium of more than $24 million. PFM Financial Advisors LLC acted as municipal advisor.