New $85 Million Construction Fund Established for Upcoming Capital Projects

NEW HOPE, PA – The Delaware River Joint Toll Bridge Commission recently completed a series of refinancing transactions that are enabling the bistate transportation agency to reduce its prior debt service obligations, eliminate unanticipated interest rate fluctuations, and establish a construction fund for upcoming capital projects.

The transactions were bolstered by advantageous bond market conditions and strong grade-A credit ratings for Commission bonds.  Combined, the two transactions enabled the Commission to do the following:

  • Defease slightly more than $50.73 million of outstanding bonds and associated interest expense;
  • Redeem $98.4 million of risk-prone variable rate bonds and a like amount of interest rate swaps;
  • Create an $85 million construction fund for three large capital projects and various smaller projects over the next several years; and
  • Achieve a combined net present value savings of $4.3 million.

On July 2, the Commission completed a transaction that optimized the use of its general fund balance by allocating $55.6 million to an escrow account specifically dedicated to redeeming portions of bonds that were issued in 2012 and 2015.  As a result of this action, the Commission reduced its prior debt service by a total of $68.3 million.

On July 31, the Commission received the proceeds of a second transaction involving a combined $173.37 million bond offering that went to pricing on July 16.  This transaction involved the sale of $73.64 million Bridge System Revenue Bonds, Series 2019-A, and $99.73 million Bridge System Revenue Refunding Bonds, Series 2019B.

The Commission received orders for the bonds from 51 different investors, including 28 new buyers that did not previously hold Commission bonds.  The total amount of orders for bonds was $1.35 billion, or 7.7 times the amount of bonds offered for sale. Based on this demand, the Commission achieved a true interest cost (TIC) of 2.2 percent.

The Series 2019A bonds were issued to finance the costs of several upcoming projects, including – but not limited to – the following:

  • Construction of a new southern region operations facility, maintenance garage and salt storage facility to be built on recently purchased Commission property in Langhorne, PA that provides tactical access to I-295 and Route 1;
  • Demolition and reconstruction of toll operations and maintenance facilities on the site of the Commission’s obsolete administration building adjacent to Route 1 in Morrisville;
  • Floor-system replacement and rehabilitation of the Commission’s Northampton Street Toll-Supported Bridge linking Easton, PA and Phillipsburg, NJ.

Proceeds from the Series 2019B bonds were used to redeem the Commission’s outstanding Series 2007B variable-rate bonds and terminate their associated swap agreements that had been in place since 2007.

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