NTE Segments 3A & 3B Project Reaches Financial Close


The North Tarrant Express Segments 3A & 3B Project (Project) reached financial close earlier today.  The Project will provide over $1.5 billion of needed infrastructure to the Fort Worth area, as well as operations and maintenance over the next several decades.  The Project will expand Interstate 35W in north Fort Worth, one of the region’s top priorities for congestion relief.  Segments 3A and 3B are the primary focus of the North Tarrant Express Master Development Plan, and will add approximately 10 miles of I-35W to the North Tarrant Express project.

Pursuant to the agreement between TxDOT and NTE Mobility Partners Segments 3 LLC (Developer), which reached commercial close last March, Developer will design, build, operate and maintain Segment 3A - the portion of the road from I-30 to Loop 820.  TxDOT will build Segment 3B - the portion of the road from north of Loop 820 to U.S. 287 at an estimated cost of $234 million, prior to turning it over to Developer.  Developer will be responsible for the operation and maintenance of the facility and will collect the tolls generated on the managed toll lanes of the facility until 2061.

Private funding for the project consists of a combination of a $531 million loan under the Transportation Infrastructure Finance and Innovation Act (TIFIA), $274 million in private activity bonds and approximately $430 million in private equity, totaling in excess of $1.2 billion.  The average interest rate on the private activity bonds (PABs) is 6.87% per annum, while the TIFIA interest rate is 3.84% per annum.  The underwriters for the PABs are JP Morgan Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Barclays Capital Inc. and Estrada Hinojosa & Company, Inc.

Work under the agreement includes rebuilding existing lanes and adding two managed toll lanes in each direction of I-35W from north of Interstate 30 near downtown Fort Worth to the U.S. 287 split south of Alliance Airport.  Construction could begin by fall-2013 and be substantially completed by mid-2018.  The agreement for the NTE Segments 3A & 3B Facility is available on TxDOT’s website.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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