Proceeds will be used to retire $522 million of existing bank debt, pay swap breakage, partially prepay a portion of the U.S. federal TIFIA loan and make a special upfront dividend. The refinancing was structured as a 4(a)(2) U.S. private placement note offering, targeted mainly at large insurance companies and pension funds. The new capital structure will include a single tranche of Senior Notes of $827 million and the remaining $560 million of TIFIA loans. ACSID and TeachersÂ’ Insurance and Annuity Association of America, part of TIAA-CREF, are each 50% equity sponsors in the concession company, I 595 Express, for the project.
The I-595 Project was the first Availability Payment-based deal in the United States and was Florida's first public-private partnership, which closed in 2009 in the height of the financial crisis. In March 2014, the 5-year design and construction program to deliver new express lanes and other improvements to congested areas along the portion of Interstate 595, was delivered on-time and on-budget. The Company will continue to perform all operations, maintenance and lifecycle obligations through 2044, for which it will receive scheduled availability payments during the operating period. With the Project largely de-risked after completing the construction period, the ACSID and TIAA launched the refinancing approximately 12 months after full operations.
At pricing, the offering was significantly oversubscribed and the final book will include 14 institutional investors, including some of the largest and most sophisticated in the private placement market. A final spread of +155 bps was achieved over the 7-year interpolated Treasury for an all-in coupon of 3.31% for a final maturity in 2031.
Pursuant to a refinancing agreement in place, the Sponsors and FDOT share 50% of the net present value benefits from the refinancing and the FDOT will realize its gain through a long-term reduction of its Availability Payment obligations. Also, pursuant to the TIFIA Loan Agreement in place, TIFIA will receive an early prepayment of a portion of its loan equal to 50% of net proceeds from the additional debt under the new capital structure.
Barclays served as financial advisor to Sponsors on the transaction. Barclays and BofAML acted as lead placement agents. Credit Agricole, Santander and Societe General acted as co-agents. Hunton & Williams and Simpson, Thatcher & Bartlett served as SponsorsÂ’ and InvestorsÂ’ Counsel, respectively. The Florida Department of Transportation was advised by Ernst & Young and Nossaman as financial and legal advisor, respectively, as well as by the State of Florida Division of Bond Finance.
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