40
infrastructure
investor
may
2014
BANKING AWARDS FOR EXCELLENCE 2013
NORTH TARRANT EXPRESS SEGMENTS 3A AND 3B
Category:
North American transport
Winner:
North Tarrant Express
Segments 3A and 3B
Nominated by:
Taylor-DeJongh
(financial adviser to TIFIA)
Other participants included:
Cintra
Infraestructuras (sponsor); Meridiam
Infrastructure (sponsor); Dallas Police
and Fire Pension System (sponsor);
APG (sponsor); Citibank (financial
adviser to sponsors); KPMG (financial
adviser to authority); TIFIA (lender);
JP Morgan Securities (mandated lead
arranger); Merrill Lynch (mandated
lead arranger); Pierce Fenner & Smith
(mandated lead arranger); Barclays
Capital (mandated lead arranger);
Estrada Hinojosa & Company
(mandated lead arranger); Gibson,
Dunn & Crutcher (legal adviser to
sponsors); Latham&Watkins (legal
adviser to lenders); Nossaman
(legal adviser to authority); Hawkins
Delafield &Wood (legal adviser to
TIFIA); Jacobs (technical adviser to
authority); AECOM (technical adviser
to sponsors); Hatch Mott Macdonald
(technical adviser to lenders); CDM
Smith (traffic & revenue adviser); SAM
Construction Services (independent
engineer)
Date of transaction:
19th September 2013
Size of transaction:
$1.7bn
Honourable mentions in this category:
Luis Munoz Marin International Airport
concession
(nominated by RBC Capital
Markets)
In the US, much collective brain-
power has been directed at the thorny
issue of how to get the public and
private sectors working together
optimally to deliver the nation’s infra-
structure. In the case of the North
Tarrant Express project in Texas, par-
ticipants feel they may have cracked
the code.
“Interdependence” is the word
used in the deal’s submission by Tay-
lor-DeJongh, which acted as a finan-
cial adviser. Specifically, this refers to
a “dual delivery” method by which
responsibility for the construction of
Segments 3A and 3B of the Express-
way was split between the private
concessionaire, NTEMP3, and the
public sponsor, Texas Department
of Transportation (TxDOT).
Taylor-DeJongh pointed to the
“uniqueness of the project” arising
from this interdependence, with both
segments needing to be completed
to ensure the project’s success. “In
addition, the dual delivery method
stipulates a more creative project
structuring solution and the careful
balancing of risk allocation between
the two key counterparties, matched
by an appropriate mix of public and
private funds.”
The firm added: “The dual
delivery method allows for the most
efficient delivery of each segment,
while still allowing the concession-
aire to get the maximum benefits
of the toll revenues on both seg-
ments to support repayment of the
project’s debt.”
The funding also showed the
public and private sectors in harmony.
From the public side came TxDOT-
issued Private Activity Bonds (PABs)
– with below market interest rates
due to their tax-exempt status – and
a TIFIA (Transportation Infrastruc-
ture Finance and Innovation Act)
loan. TIFIA is a government initia-
tive offering low interest rates with
flexible long-term repayment profiles
to eligible projects.
The North Tarrant Express project showed public and private sides in the US
working in harmony, on both project delivery and financing
All in it together
