Press Releases

For Immediate Release

Bay Area Toll Authority Sells $400 Million in Bonds for Bridge Work

Agency successfully completes initial debt offering

CONTACT:

Rod McMillan
510.817.5860

Brian Mayhew
510.464.7882

Joe Curley
510.817.5847

OAKLAND, Calif., May 24, 2001...The Bay Area Toll Authority (BATA) announced today that it has successfully completed the sale of $400 million in revenue bonds. Proceeds from the debt offering -- BATA's first -- will be used to finance a program of major improvements to Bay Area toll bridges, including new spans for the Carquinez and Benicia-Martinez bridges and a widening of the San Mateo-Hayward Bridge.

"This is good news for commuters and other users of Bay Area bridges," said Sharon Brown, councilmember for the city of San Pablo and chair of the Metropolitan Transportation Commission (MTC), which operates BATA. "The sale of these bonds means BATA can continue to move full speed ahead to deliver the Regional Measure 1 program of bridge projects and bring congestion relief to key travel corridors."

Regional Measure 1 is the 1988 ballot measure that authorized a standard base auto toll of $1 to fund a $1.5 billion overhaul and upgrade of Bay Area toll bridges and their approaches, along with other traffic-relieving projects. [See Attachment A for a list of the Regional Measure 1 bridge projects and their costs.] Responsibility for overseeing the Regional Measure 1 program passed to BATA (from the California Transportation Commission) in 1998, at the time of BATA's creation by an act of the California Legislature. BATA also is responsible for the funding of day-to-day operations, facility maintenance and administration of the toll bridges from the revenues generated from the base bridge toll. (The second dollar of the $2 toll now paid by bridge users was added in 1998 to pay for a separate, Caltrans-administered bridge seismic retrofit program, including a new east span of the San Francisco-Oakland Bay Bridge.)

In its initial debt offering, BATA issued $300 million in variable-rate bonds and $100 million in fixed-rate bonds. The variable-rate bonds are sold in denominations of $100,000 and mature in 2036. The fixed-rate bonds, sold in denominations of $5,000, mature in 2018 and carry an effective annual interest rate of 4.86 percent. Both bonds are "double-tax-free" to California residents, meaning interest from the bonds is exempt from federal and state income tax. The bonds will be repaid using toll revenues, excluding the $1 seismic surcharge, from the seven state-owned toll bridges in the Bay Area. (The Golden Gate Bridge is not included in this group; it is owned and operated by the Golden Gate Bridge, Highway and Transportation District.)

The BATA bonds were given top marks for creditworthiness by the major credit rating agencies, receiving 'AA' ratings from Fitch and Standard & Poor's, and an 'Aa3' from Moody's. Standard & Poor's noted in its credit profile that BATA's 'AA' rating "... represents one of the highest credit ratings Standard & Poor's carries on a toll agency, and the highest among all transportation-related enterprises."

"Achieving these ratings was a major coup for a first-time bond issuer like BATA," noted MTC Chief Financial Officer Brian Mayhew. "Not only are they a testament to BATA's financial strength and its ability to deliver the Regional Measure 1 program, but they also translate into millions of dollars of savings on interest payments. If we had not secured these high ratings, BATA would have had to offer the bonds at higher interest rates, increasing our debt service burden and reducing the amount of funds we could devote to improvements on the bridges."

BATA's long-term financial plan calls for the issuance of approximately $600 million in additional bonds between 2002 and 2005. This would bring total bond indebtedness to around $1 billion.

Investment banking services for the $400 million bond offering were provided to BATA by JPMorgan, Salomon Smith Barney and Stone & Youngberg, LLC.

MTC is the transportation planning, coordinating and financing agency for the nine-county San Francisco Bay Area. Operating as BATA, the agency also is responsible for the programming, administration and allocation of toll revenues from the $1 base toll on the seven state-owned toll bridges in the region.

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Attachment A

Regional Measure 1 Capital Projects

Project	Cost ($000)	Date of Completion
New Benicia-Martinez Bridge - eastbound (under construction)	585,965	June 2004
Carquinez Bridge Replacement – westbound (under construction)	479,777	Sept. 2003
Richmond Parkway (near completion) Richmond-San Rafael Bridge Trestle Rehabilitation (under construction) Richmond-San Rafael Bridge Deck Rehabilitation (under environmental review)	5,897 35,375 53,436	May 2001 Sept. 2004 Sept. 2006
San Mateo-Hayward Bridge Widening (under construction) I-880/SR-92 Interchange Improvements (under environmental review)	203,956 134,181	Dec. 2002 Dec. 2006
Dumbarton Bridge Bayfront Expressway (SR-84) Widening (in design) US-101/University Ave. Interchange Improvement (completed)	33,775 3,800	March 2003 (complete)
Total	$1,536,162

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