Featured Municipal Bond Issue: $304 Million Dallas Area Rapid Transit Senior Lien Sales Tax Revenue Refunding Bonds
Featured Municipal Bond Issue: – Dallas Area Rapid Transit Senior Lien Sales Tax Revenue Refunding Bonds, Series 2019
Our featured new issue municipal bond of the week is Dallas Area Rapid Transit, which is planning to negotiate the sale of a refunding issue to lower its outstanding debt service costs.
Dallas Area Rapid Transit (DART) is planning to issue $304,235,000 Senior Lien Sales Tax Revenue Refunding Bonds, Series 2019 the week of March 11, 2019. These bonds are being issued by a negotiated sale led by the Bank of America Merrill Lynch, which is the Senior Managing Underwriter.
Bond Proceeds of the Series 2019 Bonds will be used to refund a portion of DART’s outstanding Series 2009B Bonds (2034 Term Bonds) for debt service savings. The proceeds will also pay the costs of issuance of the Series 2019 Bonds.
The bonds are payable from and are secured by a first lien on the gross 1% sales and use tax revenues derived from the service area , pledged farebox revenues and federal interest subsidy payments that are deposited to the Senior Lien Debt Service Fund and investment earnings credited to the gross sales tax revenue fund. The issuer states that Sales tax revenues are collected from the Comptroller and sent directly to the trustee holding the Senior Lien Debt Service Fund for the bond issue.
The 2019 Bonds are to be rated Aa2 by Moody’s, AA+ by Standard & Poor’s and AA+ by Kroll.
Principal is expected to be structured for annual repayments beginning in 2023 and ending in 2034 (subject to changes at the final confirmation of the sale).
Details on the purposes, tax-status, security, as well as other matters and risks pertaining to these Dallas Regional Transit Authority Bonds can be found in the preliminary supplemental official statement (register on the MuniOS website).
The supplemental official statement should be read in conjunction with DART’s 2018 Annual Disclosure Statement, which can be found on the Municipal Securities Rulemaking Board EMMA site. After registering, visitors can link direct to the preliminary supplemental official statement as well as a Roadshow Presentation regarding this bond issue by searching for the Dallas Area Regional Transit on the MuniOS website.
About Dallas Area Rapid Transit and a Financial Snapshot of the Issuer
DART’s mass transit services include multiple transportation modes, including bus, light rail, commuter rail, ADA complementary paratransit services and car/van pools. The light rail mass transit service covers 93 miles and 64 stations and is the fastest growing segment of its mass transit mission. On the horizon, DART plans to issue over $1 billion in senior lien sales tax revenue bonds over the next two or three years to finance a subway.
DART’s service area encompasses 700 square miles in and around the City of Dallas, Texas. Its service area has a 2018 population of over 2.4 million persons. The largest city in the system is Dallas with a population of over 1.3 million.
According to the Bureau of Labor Statistics, Dallas County (as of December 2018) has an unemployment rate of 3.4%, which is .3% lower than the national rate for the same time period.
Provided below (click to expand) is a quick snapshot of financial characteristics of DART as of the end of fiscal year 9/30/2018, compared with the medians for the Merritt Dedicated Tax Category for 2017-2018, courtesy of Merritt Research Services, LLC.
Merritt has many of the sector medians publicly available and regularly updated on their Benchmark Central page. (Merritt Research believes the data to be reliable but does not make any representations as to its accuracy or completeness. Calculations provided by Merritt may differ from those provided by the issuer due largely to standardized formula approaches used by Merritt Research.)
Disclosures and Disclaimers
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 which can be found on the website MuniOs.com. 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. Merritt Research’ s calculated issuer ratios and any category medians may differ from official issuance documents due to methodology or survey base variances.