Iridium closes its first bond issue in the USA, worth $ 227 million to finance Porthsmouth Bypass in Ohio (USA)
The Portsmouth Gateway Group (PGG), led by ACS Infrastructure Development, Inc., is very pleased to announce that it reached financial close on April 9, 2015 for the 39-year contract with the Ohio Department of Transportation (ODOT) to design, build, finance, operate and maintain the new Portsmouth Bypass limited-access highway (State Route 823) around the City of Portsmouth in Scioto County, Ohio. We look forward to our long-term partnership with the Ohio DOT and to contributing to the community of Scioto County.
The US$557M Portsmouth Bypass project in Scioto County, Ohio involves the design and construction of 16 miles of a new four-lane divided highway, to be designated State Route 823 (SR 823). The project will improve travel safety and regional mobility, avoiding significant numbers of traffic signals, intersections, and driveways over the current 26-mile route using US 52 and US 23. The project includes a 35-year maintenance term following the completion of the works. ACS, with its equity sponsors, will self-perform the operations and maintenance work through the Portsmouth Gateway Group.
The project is financed through a combination of public funds and private financing. The financing for the project includes a $208 million TIFIA loan from the United States Department of Transportation, which closed on March 31, 2015, as well as an over-subscribed issuance of $227 million of tax-exempt Private Activity Bonds, underwritten by J.P. Morgan and Barclays Capital, of which $108 million of bonds were insured by Assured Guaranty. Approximately $49 million of equity will be injected by ACS and its equity partners at the end of construction and is guaranteed by letters of credit posted by the equity sponsors at financial close. During the construction, the State of Ohio will provide a total of $45 million of public funds payable upon completion of designated progress. The Ohio Department of Transportation will also make payments to PGG during the operating period through annual availability payments.
The Portsmouth Gateway Group is comprised of equity sponsors ACS Infrastructure Development, Inc. (40%), InfraRed Capital Partners Limited (40%) and Star America Fund GP LLC (20%). This team of P3 developers has an unparalleled track record of delivering large and complex transportation P3 projects in North America and globally. The design and construction works will be undertaken by Portsmouth JV, a joint venture of construction companies led by Dragados USA, the U.S. construction subsidiary of the Iridium, together with two preeminent Ohio construction firms, Beaver Excavating Company and John R. Jurgensen Co., Inc. The local construction partners, Beaver Excavating and John R. Jurgensen, are both 3rd generation, family owned contractors who together have over a century of experience in Ohio. The lead engineering firm, ms consultants, inc., brings significant experience working with ODOT and specialty design subconsultants, including TranSystems Corporation and S&ME Inc., will complete the design team. HDR Engineering, Inc. will provide independent design and construction quality oversight.
The consortium had been named ‘apparent Successful Proposer’ on October 15, 2014, and had entered in the contract with ODOT on December 5, 2014.
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