Q3 2024 Project Update
A Remarkable Tender Transaction for the Utah Transit Authority
The Utah Transit Authority (“UTA”) provides public transportation to the most populous part of the state known as the Wasatch Front, representing 80% of the state’s population.
BondCom first worked with UTA in September 2023, when we served as Information Agent and Tender Agent in the execution of a tender offer targeting 13 of their taxable and tax-exempt bonds, spread across five series, totaling $431.505 million. UTA received tenders totaling $154.11 million, and ultimately purchased $101.175 million of the tendered bonds. The transaction was funded by the proceeds from a new issuance of $77.6 million in Series 2023 bonds.
In August 2024, BondCom was once again engaged by UTA as they undertook an even more ambitious transaction, which resulted in a new issuance of $540.34 million in new Series 2024 Bonds. The deal involved the redemption of two series of outstanding Build America Bonds totaling $461.45 million (utilizing an extraordinary optional redemption provision), as well as $26.425 million of its Series 2007A bonds. Coupled with these redemptions was a tender offer targeting 24 of their taxable and tax-exempt bonds, spread across eight series, totaling $389.510 million (including 10 of the same bonds previously targeted by the 2023 tender). UTA received tenders totaling $99.555 million, and ultimately purchased $83.0 million of the tendered bonds.
The 2024 transaction allowed UTA to successfully refinance its outstanding debt portfolio through a two-pronged approach of redeeming high maintenance BABs (including a $261.45 million issuer-subsidy BAB due 2039 with a 5.937% interest rate) and targeting specific maturity years for retirement through tender offer. In total, UTA redeemed or purchased $570.875 million in outstanding principal amount. The transaction was funded by an issuance of $540.34 million in new Series 2024 bonds with an interest rate of 5% and maturities from 2030 to 2042.
Wells Fargo Bank served as underwriter for UTA’s Series 2024 bonds and as dealer manager for the tender offer. Zions Public Finance Inc. served as municipal advisor for the Series 2024 bonds.
It was our distinct pleasure to assist UTA with these successful transactions.
If you would like assistance with bondholder initiatives, click here to contact BondCom’s team.