Plenary Walsh Keystone Partnership's has concluded the issuance of Private Activity Bonds (PABs) for the debt financing of its Pennsylvania Rapid Bridge Replacement PPP project.
The total amount raised has been US$800 million (tax-exempt). 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%.
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.
Plenary Walsh Keystone Partners includes: Plenary Group, infrastructure investor (80%), Walsh Investors, infrastructure investor (20%), The Walsh Group, lead contractor, HDR Engineering, lead engineer, and Granite Construction Company (contractor).
The project includes the develop, design, construct, and maintain 558 geographically dispersed, structurally deficient bridges across the Commonwealth of Pennsylvania. After repair and construction is completed, the project will maintain the bridges under a 25-year availability concession with PennDOT
The total project investment is estimated at US$900 million. During the 36-month construction phase, the project will receive $224.75 million in milestone and mobilization payments from Pennsylvania Department of Transportation (PennDOT).
Formal 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.
Brian Budden, Executive Vice President of Plenary Group North America, commented:
"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."
"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."