Indiana's section of the Ohio River Bridges Project has won national “Deal of the Year” honors from The Bond Buyer. The Indiana Department of Transportation says the project is the first public-private partnership to win the award.
December 12, 2013
Indianapolis, Ind. — The East End Crossing of the Ohio River Bridges project has been named the national Deal of the Year by The Bond Buyer publication. The prestigious award was announced at a reception Dec. 5 with the nation’s senior bond professionals in New York City. This year's competition drew a record number of nominations from financings of hospitals, housing, toll roads and airports ranging in size from a few million to billions of dollars.
“Congratulations to the Indiana Finance Authority, Indiana Department of Transportation and WVB East End Partners for being the first public-private partnership team to win the national Deal of the Year award,” said Indiana Governor Mike Pence. “Delivering world-class infrastructure under budget with an accelerated construction schedule is what makes Indiana a state that works.”
Indiana and Kentucky signed a Development Agreement in October 2012 that divided responsibilities for design, construction and financing of two Ohio River bridges between Southern Indiana and Louisville. Indiana was responsible for procuring the East End Crossing, which connects the I-265 outer beltway around the Louisville metro and promotes economic development in southern Indiana.
Governor Pence also announced last week that all three bond agencies – Standard and Poor’s, Moody’s, and Fitch Ratings – maintained Indiana’s AAA credit rating that it has held since April 2010. Indiana leveraged its stellar credit rating to attract low-cost private sector financing using an availability payment form of public-private partnership (P3).
Availability payment P3s transfer from taxpayers to the private sector risks of cost overruns, both during construction and for operations and maintenance during a defined time period. If the road isn't made “available” to the public in compliance with performance standards in the contract, the recurring, inflation-adjusted payments are reduced accordingly.
The East End Crossing P3 was financed through the sale of around $675 million of tax-exempt Private Activity Bonds (PAB), including $195 million of milestone PABs, a new security type that can serve as a template for other P3 concessions.
The deal — the largest P3 PAB offering completed to date in the U.S. municipal market — “financed a large infrastructure project that fulfilled a public need. It was innovative, replicable, and took an immense amount of cooperation across a number of sectors to come to fruition,” said Michael Scarchilli, editor in chief of The Bond Buyer, who presented the award to Indiana Public Finance Director Kendra York.
The 2013 awards recognized deals that closed between October 2012 and September 2013. The Indiana Finance Authority reached financial close with WVB East End Partners, a consortium of Walsh Investors LLC, VINCI Concessions, and Bilfinger Project Investments, in March 2013. Kentucky plans to sell $747 million of tax-exempt and taxable debt this month to fund its portion of the Ohio River Bridges Project.
More information about the project is available at www.eastendcrossing.com.
Source: Indiana Department of Transportation