Estrada Hinojosa has had the honor to serve on Miami-Dade County’s Underwriting Team since 1993. The firm was awarded the role of Senior Manager for the County’s $32,950,000 Rickenbacker Causeway Revenue Bonds which closed in September 2014. The bonds were issued to pay for the infrastructure repairs required to rehabilitate the Bear Cut and West Bridges on the Rickenbacker Causeway, a 3.6 mile causeway providing sole access from the Miami-Dade County mainland to Virginia Key and Key Biscayne. The Rickenbacker Causeway has been operating since 1940 and has been managed by Miami-Dade County. The Causeway operates a one way toll road facility. There are no competing alternatives to the Causeway.
The Causeway has a strong track record of toll revenue collections. The Causeway revenues have been previously used to pay off the $5,785,000 Dade County Causeway Revenue Bonds, Series 1941 issued to purchase the causeway and subsequently the $24,450,000 Dade County, Causeway Revenue Bonds, Series 1983 issued to pay for CIP programs to ease traffic delays, including the construction a new five lane high level bridge, and to update the Causeway.
The bonds have a Senior Lien Pledge of Net Toll Revenues and Reserves for 29 years. The issue is tax exempt, and has a fully funded DSRF. It received underlying ratings of BBB+ (S&P), and BBB (Fitch). The legal covenants are strong, including a 1.25x Toll Rate Covenant, with 1.5x Additional Bonds Test on Historical Revenues and 1.75x on Forecasted Revenues. The structure included Serial Bonds maturing October 1, 2015-2036 and a Term Bond maturing October 1, 2043. Estrada Hinojosa underwrote the 2015 maturity amounting to $525,000. The True Interest Cost on the issue was 4.27%. A comparable issue on the market was the Miami-Dade Expressway Authority Toll System Revenue Bonds, with higher ratings of A3/A-/A- and it traded with a TIC of 4.22%.
It traded with stand-alone ratings of BBB+/BBB, the lowest ratings of bonds the County had ever traded. Our firm was not only able to create a new set of buyers for the County, but the issue was oversubscribed and we were able to re-price for better yield due to the high demand created for the bonds.