Bond Sales Bring In $150M For Delaware River And Bay Authority

The Delaware River and Bay Authority made $150 million off two recent bond sales, the authority announced on Thursday. That money will be used to fund major capital projects associated with the future Capital Improvement Program (CIP).

Projects that will be covered by the funding include the construction of the new ship collision protection system for the Delaware Memorial Bridge and the Ultra-High-Performance Concrete (UHPC) overlay deck system on the New Jersey-bound bridge.

“We are extremely pleased with the market's reaction to both series offerings,” Delaware River and Bay Authority Chief Financial Officer Victor A. Ferzetti said. “The true interest cost achieved demonstrates the market’s belief in our credit quality and validates the success of our focus on managing the Authority's financial and operating assets.”

The money was made from a $75 million 2021 Series Revenue Bonds and a $75.04 million 2022 Forward Refunding Series Bonds. Details from those sales can be found below:

• The Authority offered potential investors competitive interest rates and, in doing so, received more orders from interested bond purchasers for the $75 million in 2021 Revenue Bonds available (the issue was significantly oversubscribed).

• The overall borrowing cost (referred to as “True Interest Cost” or “TIC”) for the 2021 Series A was 2.45% for the 25-year financing, which is among the lowest historical transactional cost ever achieved by the DRBA.
• The second transaction involved the refunding of approximately $94 million dollars of current outstanding Series 2012 bonds. The $75.04M Series 2022 Forward Refunding Revenue Bonds will refund and replace this debt at an All-in rate of 2.13%, saving the Authority over $1.2 million in annual debt payments or $22.3 million in savings over the life of the remaining 20-year term.

Moody’s Investors Service (Moody’s) and Standard and Poor’s (S&P) rated both bond offerings (2021 Series A and 2022 Forwarding Refunding Series Bonds) A1 and A, respectively.

In its rating analysis, S&P specifically pointed to the authority’s “very strong management and governance, with management that we believe has a track record of operating its Toll Roads Bridges major lines of business and managing risk effectively.”

In fact, the Delaware Memorial Bridge continues its robust rebound from pandemic lows during the second half of 2021, registering record-setting monthly traffic volume in five of six monthly comparisons, according to the authority.

Both bond offerings received strong interest from the retail investment communities of Delaware and New Jersey, as well as institutional investors. Co-Senior Managers JP Morgan Securities and Citigroup Global Markets were joined by Co-Managers Bancroft Capital, Loop Capital, and Stern Brothers to market and negotiate both bond transactions. The sale closed on Dec. 1.