The North Carolina Turnpike Authority issued $340.4 million in bonds to extend an expressway near the state’s capital.
The authority sold the bonds in two series. The Series 2024A bonds mature between 2053 and 2058, yielding between 4.17% and 4.23%. The Series 2024B bonds mature between 2050 and 2053, yielding between 4.88% and 4.96%. The securities received an underlying rating of BBB+ from Fitch Ratings and BBB from S&P Global Ratings, which assigned an insured rating of AA.
The bond proceeds will finance the expansion of the Triangle Expressway, a highway west of Raleigh, North Carolina’s capital. The extension will provide a missing loop connecting the Triangle Expressway to Interstate 540, a highway which encircles most of the Raleigh metropolitan area.
“The rating reflects the Triangle Expressway’s history of robust traffic and revenue growth and the Complete 540 expansion project’s commuter-based traffic profile, supported by an expanding service area with strong population and economic growth,” Fitch analysts wrote.
When it is completed, the 540 expansion project will mark the largest-ever investment in North Carolina highway infrastructure, a North Carolina Department of Transportation official told the Engineering News-Record. The department expects the full 540 loop to be completed in 2028.
The Triangle Expressway’s revenue has increased steadily since the pandemic reduced traffic to a five-year low. The road generated $49 million in turn revenue in 2023, compared to $52 million in 2019, according to the turnpike authority.
The bonds are special obligations of the turnpike authority, payable by a lien on Triangle Expressway toll revenue.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds with a premium of $19 million. PFM Financial Advisors LLC acted as financial advisor.