MARTA’s Bond Refunding Yields $41.6M in Savings
Monday, August 7th, 2017
The Metropolitan Atlanta Rapid Transit Authority Board approved a resolution to refund $250 million of its Series 2009A bonds, saving the Authority $41.6 million in future interest costs or 16.6%. MARTA’s average interest savings is anticipated to reach $2.7 million per year.
The new Series 2017C bonds, issued by Bank of America Merrill Lynch, reduced the average fixed bond interest rate from 5% to 3.4%. Over the last five years, MARTA’s improving financial condition resulted in bond ratings of AA+ from S&P and Aa2 from Moody’s.
“This is a significant saving for the Authority as we continue to strategically find ways to be good stewards of our financial resources,” said MARTA General Manager/CEO Keith Parker. “This type of bond refunding effort enables MARTA to do more and enhances our opportunities for strong bond ratings from Wall Street.”
MARTA was quick to jump on this refunding of its Series 2009A bonds to take advantage of favorable market conditions. MARTA had been monitoring market conditions for the past year and recently saw a dramatic improvement in savings. MARTA executed the transaction in less than four weeks.
Financial advisors at Hilltop Securities, First Tryon Advisors and TKG and Associates, and a legal team from Holland and Knight, Kutak-Rock and Townsend and Lockett LLC, along with MARTA staff coordinated efforts to create a major saving scenario for the Authority.
AT A GLANCE:
MARTA’s $250 million bond refunding results in $41.6 million in savings
The Authority will save $2.7 million annually
MARTA holds a AA+ bond rating from S&P and Aa2 from Moody’s