Second round of bonds fuel Rebuilding Michigan projects

Talking Michigan Transportation

This week on the Talking Michigan Transportation podcast, an update on Gov. Gretchen Whitmer's Rebuilding Michigan program as the deal closes on another $800 million in bonds.
The bonds closed today will cover the cost of rebuilding some of Michigan's most highly traveled freeways. When all of the $3.5 billion bonds are sold over the next few years, they will finance or help accelerate rebuilding or major improvements of 122 major highways across the state.
View the status of road and bridge projects here.
In a unanimous vote in January 2020, the Michigan State Transportation Commission (STC) authorized the department to issue and sell $3.5 billion in bonds backed by state trunkline revenues.
Gov. Whitmer spoke on the podcast at the time about her Rebuilding Michigan plan, rolled out in her 2020 State of the State address and the STC vote.
First up this week, Patrick McCarthy, director of the Michigan Department of Transportation's (MDOT) Bureau of Finance, talks about the latest closing and another favorable market reaction.
Later, Suzanne Shank, president and the largest equity owner of Shank Williams Cisneros & Co., and CEO of Siebert Williams Shank & Co., talks about her firm's role in underwriting the deal. Her firm is the top-ranked minority and woman-owned underwriter of municipal bonds in the country.
McCarthy says the low interest rates are very similar to those for the first closing in 2020, with total proceeds of just more than $1 billion from the $800 million in bonds. The all-in true interest costs are 2.35 percent. The maximum annual debt service maintains 5.9 times coverage against revenues, well above the four times coverage required by STC policy.
​In addition to the Rebuilding Michigan bonds issued, MDOT took advantage of favorable market conditions and refunded $68.2 million of trunkline bonds. This refunding will yield net present value savings of $19.3 million, which will be directed back into the trunkline road and bridge program.
During her segment, Shank talks about her firm's role in finding buyers for the bonds and completing the transactions. She also offers some context about who buys the bonds and explains the bonds are garnering a premium on the market because of the solid credit rating and high demand.