Contact: Media Relations
Phone: (512) 463-8700
Date: Feb. 2, 2015
Savings of almost $1 billion over time can be used for highway improvements
AUSTIN – The Texas Department of Transportation has achieved the greatest savings on a single bond deal in the state’s history through a $1.68 billion refinancing that priced Jan. 21.
The bond issue refinanced nearly all the outstanding debt for the Central Texas Turnpike System (CTTS), first issued in 2002. The savings amounted to $380 million in terms of present value or more than 21 percent of the amount of debt refinanced. On a gross basis, the savings total will be $948 million with savings beginning in fiscal year 2026. Though the savings will be realized over a long period, Texas Transportation Commissioner Jeff Austin III called the refinancing effort an outstanding achievement for TxDOT.
“This is a significant win for the State of Texas,” Austin said. “Over the long term, this is ultimately almost a billion dollars that will be used for roads, bridges and other transportation projects rather than paying off bond debt. We talk about being good stewards of taxpayers’ money, and the TxDOT finance team has walked that talk in a very significant way.”
The department benefitted from historically low interest rates as the overall borrowing cost was 4.09 percent for debt with an average life of 21.4 years. With the refinancing, TxDOT paid off a $900 million Transportation Infrastructure Finance and Innovation Act (TIFIA) loan for CTTS – the largest TIFIA loan repaid to date. There was considerable investor interest in the bond issue with more than 90 different institutional investors submitting more than $5 billion worth of orders.
Benjamin Asher, the innovative financing/debt management officer for TxDOT, led the refinancing effort for the department working with co-senior managing underwriters Barclays and J.P. Morgan. Since 2012, TxDOT has completed five such bond refinancings for a total gross savings of $1.59 billion.
The Central Texas Turnpike System (CTTS) brings congestion relief to I-35 and surrounding arterial roads in Travis and Williamson counties, as well as the Central Texas region. The CTTS also improves mobility and safety by providing more transportation options for commuters, businesses and motorists.
The CTTS currently consists of the following four toll roads: SH 130, Segments 1 through 4 from I-35 to US 183; SH 45N, from US 183 to SH 130; Loop 1, from Parmer Lane to SH 45N; and, SH 45SE, from US 183/SH 130 to I-35.
For more information, contact TxDOT Media Relations at MediaRelations@txdot.gov or (512) 463-8700.
The Texas Department of Transportation is responsible for maintaining 80,000 miles of road and for supporting aviation, rail, and public transportation across the state. Through collaboration and leadership, we deliver a safe, reliable, and integrated transportation system that enables the movement of people and goods. Find out more at TxDOT.gov. "Like" us on Facebook and follow us on Twitter.