Moody's assigns A3 to North Texas Tollway bonds

Moody's Investors Service said it assigned an initial A3 rating to the North Texas Tollway Authority's $1 billion series 2008F system second-tier revenue refunding bonds. The outlook is stable.

The issuance of the second-tier bonds was postponed in May but is now scheduled to price around July 10.

Proceeds will refinance $700 million of the authority's $1.5 billion of remaining bond anticipation notes (rated MIG1), which were issued in November 2007 and mature Nov. 19, 2008. The bonds will also fund capitalized interest, a debt service reserve fund and costs of issuance. The BANs were used to finance payments to the Texas Department of Transportation, pursuant to the project agreement to construct and operate the SH 121 toll road for a term of 50 years.

The authority is also expected to issue about $948 million in first-tier variable-rate demand bonds after this bond issuance to complete its refunding of its outstanding bond anticipation notes.

Moody's affirmed its A2 ratings on the authority's outstanding first-tier debt.

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