Oklahoma Turnpike alerts market on potential bond deal

The Oklahoma Turnpike Authority could be back in the municipal bond market late this month with a $1.3 billion deal to continue financing for a controversial expansion project and to refund outstanding debt.

The $1.087 billion of tax-exempt second senior revenue bonds and $223.3 million of refunding bonds would be priced through bookrunner Goldman Sachs the week of Jan. 27, subject to market conditions, according to a voluntary notice OTA posted Friday on the Municipal Securities Rulemaking Board’s EMMA disclosure website. 

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The deal’s preliminary official statement is due out this week, with investor meetings to take place the week of Jan. 20 in Chicago, Boston, and New York, the notice said.

The offering would mark the second round of financing for the 15-year ACCESS Oklahoma (Advancing and Connecting Communities and Economies Safely Statewide) program, which was officially launched by Gov. Kevin Stitt in February 2022 to widen existing toll roads and build new ones at a projected cost that has risen to $8.2 billion from an initial $5 billion.

To support the costlier program, the OTA board last month approved a toll hike, which spurred calls by lawmakers for state legislative oversight of toll increases.

The bonds were authorized by OTA’s board in November and by the Oklahoma Council of Bond Oversight Dec. 5. 

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An initial $500 million of bonds sold for the program in October 2023 were rated Aa3 by Moody’s Ratings and AA-minus by S&P Global Ratings and Fitch Ratings — all with stable outlooks.

Litigation brought by property owners in the path of tollway expansion projects delayed that issuance. After the Oklahoma Supreme Court ruled in the turnpike’s favor in the lawsuits in 2023, justices subsequently validated the initial debt in a 6-3 decision.

Oklahomans for Responsible Transportation, which is battling the ACCESS program, has called for a third-party feasibility study and compliance review for the upcoming bonds and the postponement of any future bond sales until an investigative state audit of OTA — ordered by Oklahoma Attorney General Gentner Drummond last year — is completed. 

As part of the upcoming deal, OTA would refund series 2017A bonds with Series 2025B bonds that are expected to be issued on a forward-delivery basis, according to the notice.