Bonds issuance for Pennsylvania Rapid Bridge Replacement Project complete

Plenary Walsh Keystone Partnership’s has concluded the issuance of approximately USD$800m of tax-exempt (subject to AMT) Private Activity Bonds (PABs) for the debt financing of its Pennsylvania Rapid Bridge Replacement Project.

Plenary Group is the lead developer and acted also as sole financial advisor in respect of this ground-breaking US PPP project. JP Morgan Chase and Wells Fargo acted as co-underwriters in placing the bonds.

“We are very pleased with the success of this issuance,” commented Brian Budden, Executive Vice President of Plenary Group North America.

“This an exciting project for the Commonwealth of Pennsylvania and our success on this debt offering further increases the Commonwealth’s already substantial savings relative to what was projected under their traditional methods of procurement,” Mr Budden said.

Rated BBB, the PABs are structured to amortize from 2018-2042 (approximate 17 year average life), and hold yields ranging between 1.50%-4.30%, with resulting all-in interest cost of 4.10%.

The PABs are supplemented by approximately USD$60 million in equity, of which 20% was invested by Walsh Investors and 80% by Plenary Group.

Under the project, Plenary Walsh Keystone Partners Consortium is responsible for fixed time and fixed price demolition and replacement of 558 structurally deficient bridges located throughout Pennsylvania, together with operation, maintenance and rehabilitation of those bridges for a subsequent 25 year term.

“To bundle 558 bridges across varied geography into one project is a pioneering application of the PPP model by the Commonwealth that can now be readily replicated in any jurisdictions in need of timely and long-life renewal of failing bridge infrastructure,” said Mr Budden.

Formal flow of funds (“Financial Close”) is scheduled to occur on March 18, 2015.

The last of the bridges are scheduled for substantial completion by December 31, 2017, many years in advance of what the Commonwealth projects would have occurred under non-PPP approach.