Counties

Featured Bond – Utah Transit Authority $551 Million


Featured Bond – Utah Transit Authority $551 Million ( )

The Utah Transit Authority (UTA) is scheduled to issue $511 in Sales Tax Revenue Bonds and Sales Tax Refunding Bonds with Wells Fargo as the lead manager. The negotiated sale is scheduled for November 6th, 2019. Each of the three Series has unique characteristics, so let’s dig into the details.

About the Bonds

Series 2019A Senior Sales Tax Revenue Bonds account for $59.8 million of the total bond issuance with an amortization schedule between 2020 and 2042 . Proceeds from these Bonds will be used to finance certain transit related projects within the UTA service area.

The 2019A Senior Bonds constitute a special limited obligation of the UTA that are payable solely from the Pledged Revenues and certain moneys held under the Senior Indenture. In the opinion of Bond Counsel, the interest on the 2019A Senior Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax.

The largest portion of this issuance is from Series 2019B Federally Taxable Sales Tax Revenue Refunding Bonds at $303 million with an amortization schedule between 2020 and 2042. Proceeds from this Series will be used for the purpose of refunding certain senior and subordinated sales tax revenue bonds previously issued by the Utah Transit Authority. 

This series is secured by the same special obligation as Series A payable solely from Pledged Revenues and money held under the Senior Indenture. The interest on the 2019B Senior Bonds is included in gross income for federal income tax purposes.

Finally, Series 2019 Federally Taxable Subordinated Sales Tax Revenue Refunding Bonds for $148 comprise the remained of the total issuance with an amortization schedule between 2036 and 2042. Proceeds from this Series will be used for the purpose of refunding certain subordinated sales tax revenue bonds previously issued by the UTA.

This Series constitutes a special limited obligation of the UTA payable solely from the Pledged Revenues and certain moneys held under the Subordinate Indenture, subject to the prior lien on Pledged Revenues securing the Senior Bonds. Interest on the 2019 Subordinate Bonds is included in gross income for federal income tax purposes. 

Utah Transit Authority

The UTA was established in 1970 and services an area commonly referred to as the Wasatch Front. This transit corridor runs approximately 100 miles from the Wasatch Mountains on the east to the Great Salt Lake on the west and covers all or portions of six principal counties (Box Elder, Davis, Salt Lake, Tooele, Utah and Weber). Nearly 80% of Utah’s population (2.5 million) live within in the UTA service area.

Three primary metropolitan areas comprise the UTA service area; Salt Lake City, Provo-Orem, and Ogden-Clearfield. According to the Bond Issuer, total ridership in 2018 was 44.2 million in passenger boardings. To improve operations and passenger satisfaction, the UTA is planning to build a variety of enhancements to the transit system infrastructure including a Depot District Technology Center which will replace the existing central bus facility. The stated goal of this project is not only to house more buses, but also to expand UTA’s fleet of alternative fuel vehicles with the intent of improving overall air quality along the Wasatch Front.

These details and more can be found on the Official Statement at MuniOS.com. You can locate the official statement by creating an account on the MuniOS website then searching for Utah Transit Authority.

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, 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.

Related News