Illinois State Toll Highway Authority 2014D

lllinois State Toll Highway Authority
Toll Highway Senior Revenue Bonds
2014 Series D

Transaction saves $33 million for Authority


In November 2014 Siebert Brandford Shank served the Illinois State Toll Highway Authority for the second time as joint-senior manager since 2010.

The Series 2014D Bonds were issued to advance refund the outstanding amount of the Authority’s 2006 Series A-1 Bonds. The Series 2014D Bonds were rated “Aa3” by Moody’s, “AA-” by S&P and “AA-” by Fitch.

As a result of the strong pre-marketing effort, the order period was highly successful with every maturity oversubscribed—after the pre-pricing, the transaction was oversubscribed for by 5 times in aggregate. As a result, Siebert Brandford Shank was able to re-price the bonds with spreads that were 3 to 9 basis points tighter than the preliminary pricing levels. At the end of the order period, there were a total of more than $1.1 billion of priority orders, 83% of which were generated by our firm. Final pricing spreads to the early AAA MMD benchmark were very tight, ranging from 16 to 44 basis points; these spreads were tighter by 10 to 16 basis points compared to the spreads for the 2019 through 2022 maturities of the Series 2014A Refunding Bonds that the Authority priced in January 2014.

Additionally, Siebert Brandford Shank evaluated the value of using OMS versus SLGS to fund the refunding escrow. Ultimately an OMS escrow was utilized which provided a 4.1 basis point benefit in escrow yield and $184,000 improvement in present value savings compared to a SLGS escrow. Overall, the refunding achieved significant present value savings of nearly $33.0 million or 11.3% of refunded par.