Washington Airport Selling $650 Million for Dulles Transit Line
By Catarina Saraiva and Allison Bennett
May 11 (Bloomberg) -- The Metropolitan Washington Airports Authority plans to sell $650 million of revenue bonds this week to help finance an extension of the U.S. capital’s passenger rail system to Washington Dulles International Airport.
The issue, backed by revenue from the Dulles Toll Road, a 14-mile (22.5 kilometer) highway to the airport, could begin selling as early as today, said Andrew Rountree, the authority’s acting chief financial officer. Its offering to individual investors, scheduled for yesterday, was delayed because of market “uncertainty” over a financial rescue of highly indebted European nations including Greece, he said.
“We’re interested in making sure that when we do bring a deal to market, there’s a receptive market,” Rountree said. “We would like to come at a time where we think that the pricing won’t be impacted by the short-term shock.”
Tax-exempt yields rose 1 basis point to 3.18 percent yesterday, up from a six-week low of 3.16 percent May 6, on concern over the debt crisis. One basis point is 0.01 percentage point. U.S. Treasury 10-year yields rose the most in nine months yesterday, ending the day at 3.54 percent, after the announcement of a $1 trillion European rescue spurred a global rally in stocks, reducing the safe-harbor appeal of Treasuries.
The ratio of 10-year municipal yields to equivalent- maturity Treasuries had reached a five-month high of 93.345 percent May 7. The higher the ratio, the more attractive municipal bonds are to investors relative to Treasuries.
“Everyone pays the price when Europe has these issues, even the municipal market,” said Justin Hoogendoorn, a Chicago- based managing director in the BMO Capital Markets Fixed Income Group. The issuers “pay the price in the form of an illiquid nervous market.”