LBJ Infrastructure Group, the consortium made up of Cintra (51%), Meridiam (42.4%), and the Dallas Police and Fire Pension System (6.6%), has reached financial close for the LBJ Freeway project.
The $2.8billion project will see the transformation of the busy IH 635 corridor located in the Dallas-Fort Worth Metropolitan area in North Texas. Construction works have begun and are scheduled to be completed in 2015. Once finished, the revamped corridor will consist of six managed toll lanes that will be capable of handling twice the amount of existing traffic which would in turn ease congestion on the route.
The concession will expire in September 2061.
$850million of funding will come from the Federal Government under the TIFIA loan programme while the procuring authority TxDOT, the State Department for Transport, will provide $490million in the form of capital contributions.
The remaining funding will come from a combination of sponsor equity ($672million) and proceeds from Private Activity Bonds ($615million). The latter was underwritten by Bank of America Merrill Lynch, JP Morgan, Estrada Hinojosa and Natixis, and was issued one week before financial close, priced between 7.0% – 7.5%.
The financial close of the LBJ Freeway project comes six months after the financial close of the North Tarrant Express project, a $2.1billion redevelopment of another toll road between Dallas and Fort Worth, also backed by Cintra, Meridiam, and the Dallas Police and Fire Pension System. On both projects, Operis performed the role of financial model auditor at the bid stage, commercial close and financial close.