MARTA Board Approves Bond Refinancing to Save Authority $32M

Staff Report

Thursday, September 17th, 2020

The Metropolitan Atlanta Rapid Transit Authority (MARTA) Board of Directors recently approved a resolution to refund $250.765 million of its Series 2012A bonds, saving the Authority $32.209 million or almost 13 percent in net present value of future debt service costs. MARTA’s average debt service savings is just over $2 million per year.

MARTA moved on this refunding of its outstanding Series 2012A Bonds to take advantage of positive market conditions and to complete the transaction during a favorable time with market rates at historic lows. 

Over the last five years, MARTA’s improving financial condition has resulted in strong bond ratings. On August 27, S&P and Moody’s reviewed and assigned a rating of AA+ and Aa2 to the Federally Taxable Refunding Series 2020B Bonds. Proceeds of the Series 2020B sale will be used to refund MARTA's outstanding Sales Tax Revenue Bonds (Third Indenture Series), Refunding Series 2012A.

Attentiveness of MARTA staff and 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, contributed to this highly successful and timely transaction. 

Barclays Capital Inc. was the lowest of six bids received.  Spreads between the winning bid and cover bid were competitive.