Saturday, February 10, 2007

by Adam L. Cataldo

NEW YORK, USA (Bloomberg): Puerto Rico's Highways and Transportation Authority will sell $1.73 billion of revenue-backed bonds next week, most of which will be used to refinance debt, a government official said Friday.

The authority plans to sell $1.27 billion of so-called refunding bonds, $250 million of transportation revenue bonds and $210 million of highway revenue bonds, said Raquel Rosenfeld, director of capital markets for Government Development Bank for Puerto Rico. The bank acts as the government's fiscal agent and financial adviser.

The timing of the sale, which will be managed by Citigroup Inc., is "mid next week, probably the 14th," Rosenfeld said.

The authority is responsible for road, highway and related construction projects on the US commonwealth.

The revenue bonds are backed by a combination of taxes, tolls and fees, including money collected from the commonwealth's taxes on both gasoline and crude oil. Half of the revenue from the commonwealth's tax on gas oil and diesel oil will go to pay of those bonds.

The authority's revenue bond credit rating was raised one level to A- from BBB+ by Standard & Poor's on February 6, and to Baa2 from Baa3 by Moody's Investors Service on February 7.

The authority had $6.5 billion of total debt as of March 31, 2006, according to an August bond document.

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