Miami-Dade County’s $1.24 billion seaport refunding wins Deal of the Year

Bonds

The Miami-Dade County Seaport Department won The Bond Buyer’s 20th annual Deal of the Year award for PortMiami’s $1.24 billion seaport revenue refunding bonds.

PortMiami is the largest cruise port in the world and a large containerized cargo port. As a result of the COVID-19 pandemic, PortMiami cruise operations were suspended for nearly 16 months.

To contend with the impact of lost cruise revenues, PortMiami reduced expenditures, eliminated incentive programs, and pursued a debt refinancing solution to reduce financial stress and provide access to new capital to support cruise and cargo infrastructure projects that were under way.

“This year, our editorial board has selected a deal that features many of the key characteristics we look for in the Deal of the Year,” Mike Scarchilli, editor in chief of The Bond Buyer, said at Thursday’s gala. “It’s a complex deal that required creative solution making to bring to fruition. It greatly helped aid in the recovery of an issuer whose revenues, and entire sector, were greatly impacted by the COVID-19 pandemic. And not only was this the largest deal in this issuer’s history, but it’s the largest since the start of the pandemic for that sector.”

The Bond Buyer’s editorial board considered a range of factors when judging entries, including: creativity, the ability to pull a complex transaction together under challenging conditions, the ability to serve as a model for other financings, and the public purpose for which a deal’s proceeds were used.

Wells Fargo Securities underwrote the bonds, just over $800 million of which were insured by Assured Guaranty. Hilltop Securities was municipal advisor on the deal. Hogan Lovells US LLP was bond counsel.

The financing team worked for over a year to develop a financing plan, credit structure and rating strategy that would accomplish PortMiami’s restructuring objectives. The highly complex financing was designed to restructure PortMiami’s debt to provide a more level debt service structure while also facilitating near-term debt service relief as cruise operations recover from the COVID suspension.

What resulted is a financing that is the largest port transaction to come to market in the United States since the surge of the pandemic, the high demand for which highlighted investor confidence in the seaport sector. The largest bond deal Miami-Dade County ever completed, the creative structuring approach and development of a new credit provide a blueprint on how to overcome pandemic-related challenges.

The awards ceremony, held at Guastavino’s in New York City, marked The Bond Buyer’s first live event in 22 months and returned Deal of the Year to the in-person format after conducting the 2020 ceremony virtually. The evening also included, for the 11th year, the presentation of the Freda Johnson Awards for Trailblazing Women in Public Finance. This year’s honorees were Robin Prunty, chief analytical officer, U.S. Public Finance at S&P Global Ratings, and Arlesa Wood, director of bond administration for Miami-Dade County, Florida. With PortMiami’s Deal of the Year win, Arlesa Wood became the first Freda Johnson award recipient to be part of a Deal of the Year award winner in the same year.

The other Deal of the Year finalists were:

MIDWEST REGION
The City of Detroit’s $175 million offering of tax-exempt and taxable social bonds is the winner in the Midwest. Proceeds from the sale will contribute to neighborhood improvement and blight remediation projects throughout the city, making it one of the rare uses of municipal bonds to fund urban blight removal, allowing the city to reach every neighborhood.

SOUTHWEST REGION
The Southwest winner is a $26.1 million issuance of taxable gas system revenue bonds by the City of Grey Forest, Texas. The transaction established a model that can be replicated, both for other Texas communities facing stress from storms like Winter Storm Uri, and for other cities and utility systems that face an increasing risk of natural disaster.

NORTHEAST REGION
The Northeast winner is the $1.24 billion Triborough Bridge and Tunnel Authority payroll mobility tax senior-lien deal for MTA Bridges and Tunnels. This marked the first new financing credit for the MTA’s transit and commuter capital program since its 2002 restructuring and marked the first long-term issuance under the security.

FAR WEST REGION
The Foothill/Eastern Transportation Corridor Agency’s $760 million issuance of taxable and tax-exempt toll road refunding revenue bonds is the winner in the Far West. The combined tender, exchange, and taxable advance refunding transaction produced significant benefits for the issuer relative to conventional alternatives.

HEALTH CARE FINANCING
The Health Care winner is the $300 million taxable bond issuance by the SouthEast Alaska Regional Health Consortium to fund construction of a critical access replacement hospital. The issuer is a nonprofit, tax-exempt tribal health consortium and this was their first public bond issuance.

ESG/GREEN FINANCING
The Board of Education of the City of Newark, New Jersey, is the ESG/Green winner for its $93.9 million offering of sustainability bonds. The financing was effectively an inaugural issuance, as it marked the Board’s first issuance after transitioning back to local board control after operating under state control for 25 years.

PUBLIC-PRIVATE PARTNERSHIP FINANCING
The New York State Thruway Authority Service Areas project is the P3 winner for its $269 million financing of tax-exempt private activity bonds. The project used a P3 structure to overcome adverse market conditions to successfully finance much-needed development along a major travel route.

SMALL ISSUER FINANCING
The Small Issuer honoree is the Buffalo Sewer Authority for its $49.2 million issuance of sewer system environmental impact revenue bonds, the authority’s first bond sale since 2003. Proceeds will implement green infrastructure projects to reduce the runoff of sewage, suspended solids, nitrogen, and phosphorus into the adjacent Niagara River and Lake Erie.

INNOVATIVE FINANCING
The South Carolina Jobs-Economic Development Authority’s RecoverSC program is the honoree in the Innovative Financing category, highlighting the $10 million City of Columbia and $1.3 million County of Bamberg financings from the first round of program funding. The program helped South Carolina’s local governments bridge financial gaps resulting from lost revenues or delayed collections regardless of population size.

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