District of Columbia; $229 million Federal Highway Grant Anticipation Revenue Bonds
– by Robert Crump
The District of Columbia (the District) is expected to issue $229 million in Federal Highway Grant Anticipation Revenue Bonds to close out this first month of the new year. Proceeds from the sale of the Bonds will be used to finance a portion of highway construction projects described below. The negotiated sale is scheduled for January 28th with Siebert Williams Shank & Co., LLC as the lead manager.
About the Bonds
The Bonds are special limited obligations of the District, payable solely from the revenues pledged to the payment under the indenture, specifically transportation funds granted under the Federal Highway Program subject to Title 23. The Bonds are being issued as a Grant Anticipation Revenue Vehicle (GARVEE), which allow debt issuers to borrow in advance of federal reimbursements for the purpose of financing new infrastructure projects. District revenues (including taxes) will not be used to secure the Bonds. The District pledges, covenants, and agrees with the holders of the Bonds that, subject to the provisions of the indenture, the District will not impair repayment of the Bonds, and will not in any way impair the rights of the holders of the Bonds or modify in any way the exemptions from taxation.
The Bonds have an amortization schedule from 2020 to 2034, and are subject to optional redemption by the District as specified in the official statement. In the opinion of bond counsel, interest on the Bonds is exempt from federal tax and District taxation, except estate, inheritance and gift taxes. Ratings from Moody’s and S&P are Aa2 and AA, respectively. This information and more can be found on the preliminary official statement and roadshow found on MuniOS.
Highway Construction Project
The District Department of Transportation is currently engaged in several construction projects throughout the nation’s capital. This particular bond issuance is primarily focused on financing the replacement of the Frederick Douglass Memorial Bridge and rehabilitation of adjacent right-of-ways to accommodate greater travel capacity expected to follow the expanded bridge. The project aims to revitalize the surrounding community and provide better transportation infrastructure to the city by increasing traffic capacity and integrating active transportation modalities. Scheduled completion date is expected for March of 2021. Bridge replacement is one piece of the total Anacostia Waterfront Initiative which includes several other large and small scale infrastructure projects along the Anacostia River. Federal transportation aid is made available to state and local entities, including the District, under a number of federal programs for highway, safety, transit, and motor carrier projects. The Project meets the eligibility requirements of the Federal Highway Administration as a federal project.
These facts and numbers are for informational purposes, and should not be considered an official disclosure for potential investors. Investors should consult the official statement. None of the information provided should be construed as a recommendation by MuniNet Guide, MuniNet LLC, Merritt Research Services LLC, or any of their employees. Information and analysis is for informational purposes only.
Potential investors should rely only on the official documents and figures provided in the official statement (prospectus). Although the numbers presented in this summary are primarily derived from public documents, including issuer audits, issuer reports and other public sources such as federal reporting agencies , they are not intended to replace official information presented in connection with the bond sale. Medians may differ from official sales documents due to methodology or survey base variances.