The NTE Mobility Partners LLC consortium held by Meridiam up to 33,3%, has successfully completed issuing a $400 million bond to finance the North Tarrant Express Managed Lanes project in Texas. The 30 year average 6.98% coupon bond issue was oversubscribed 2.4 times. It was assigned a Baa2 rating from Moody’s and a BBB rating from Fitch.

The tax-exempt Private Activity Bonds (PAB) were placed in the United States municipal bond market on December 10th. The issue, which offers an average yield of 6.98%, is a milestone in that it is the first use of PABs by a private road concession.

Two separate bonds were issued: 59.8 million dollars paying a 7.5% coupon and maturing on 31 December 2031, and 340.2 million dollars paying a 6.875% coupon and maturing on 31 December 2039.

The issue was enthusiastically welcomed by the investors in the North American markets who presented bids equal to 2.4 times the amount sought by the borrower. The operation had been organized by JP Morgan and Merrill Lynch, with the legal advice of the firms White & Case, Bracewell & Guiliani, Orrick, Herrington & Sutcliffe and McCall, Parkhurst & Horton.

"Closing this financing represents a first for several reasons: It's the first time that municipal market bonds are financing a PPP project in the United States, but it is also the first bond issue financing a real toll highway since the beginning of the year." remarked Thierry Déau, Meridiam's president. "In addition, the innovative nature of these 'managed lanes' gives this operation significant visibility in a debt market which has become very cautious in the face of the most basic risks in transport infrastructure. In this context, the NTE bond issue also marks the return of a long term financing approach, by mitigating the refinancing risks imposed by certain current types of shorter term bank loans. Finally, it's the first time that this type of project counts American retirement funds among its investors, which has been heralded by the Federal authorities as a great success."

With the closing, in 2009, the 'Port of Miami Tunnel' project in Florida, in association with Bouygues, and the NTE project in Texas with Cintra, as well as the prospect of other North American PPP's in 2010, Meridiam is now established as one of the leading infrastructure players in North America, a sector which the new US Federal Administration considers to be a spearhead of its economic revitalization programs.

The contract consists of the construction, maintenance and operation of 21.4 kilometers of the North Tarrant Express toll road in the Dallas-Fort Worth area. It will require a total investment of $2 billion. The concession period is 52 years.
The NTE consortium is headed by Cintra (which owns 56.7%), with Meridiam (33.3%) and the Dallas Police and Fire Pension System (10%).
The project involves upgrading the existing road (general purpose lanes and frontage roads), which will not be tolled, and building new tolled lanes to provide additional capacity. Tolling will be completely electronic, with no barriers, this will allow a larger volume of traffic to flow more easily. Tolls will be set dynamically on the basis of demand; prices will vary throughout the day with the goal of providing users a safe and reliable level of service.
Another consortium, composed with same shareholders (Cintra, Meridiam et DP&FPS), is currently working on financial closure of the IH-635 Managed Lanes project (LBJ 635), also in Texas, awarded in February 2009. LBJ 635 is 27.2 km (17 miles) long and is located in the Dallas metropolitan area. Investment is expected to amount to 2.7 billion dollars.