MassDOT/MBTA Board
1:00 P.M. Monday, June 29, 2015
MassDOT Boardroom
10 Park Plaza,
Plaza Suite 3830
Boston, MA 02116
Overview of Proposed 2015A Transaction
 On February
y 21st , the MBTA Board of Directors approved
pp
the issuance of one or more series of revenue bonds ( the “Bonds”) by the Authority in an amount not to exceed $200 million to finance a portion of the capital projects contained within the Authority’s Capital Investment Program.  The Bonds are expected to be issued with a senior lien on the sales tax revenues, and secured and payable by the sales tax revenues.  The Authority appointed Ramirez & Co, the lead underwriters, from among its existing co‐senior underwriting group. This underwriting group was formed through an RFP selection process.
process
 Mintz Levin serves as bond counsel and U.S. Bank National Association serves as trustee.
trustee
 The sale of the Bonds is anticipated to occur via a negotiated sale method anticipated in August/September.
August/September
1
Slide 2
Credit Profile
Senior Sales Tax Bonds
 Ratings
g (Moody’s/S&P/Fitch):
y
Aa2 (stable) / AAA (stable) / Not Rated
 The sales tax bonds are secured by a 1% statewide sales tax allocated from the Commonwealth of Massachusetts' existing 6.25% sales tax, and a subordinate lien on assessment revenues
 Additional security is derived from a debt service reserve funded at an amount equal to 50% maximum annual debt service
 Supported by a Gross Pledge of the sales tax revenues and non impairment language included in legislation
1
Slide 3
Financial Profile
Pledged Revenue Flow of Funds
- Statutory Protections of Assessment and Sales Tax Bonds
 Dedicated
Sales
Taxes
and
Assessments are collected by the
MBTA State and Local Contribution
Fund
 Assessment Fund is a separate
Assessments
Dedicated Sales Tax
MBTA State and Local Contribution Fund
(monthly
)
Assessments
Pledged Revenue Fund
(monthly
Sales )Tax Pledged Revenue Fund
Held and
Administered by
Trustee
*
entity than the Sales Tax Revenue
Fund
Senior Debt Service Fund
(Includes Interest Payable under
CP Program)
Dedicated
Payments
 The Dedicated Sales Tax credited to
the State and Local Contribution
Fund shall be deposited to the
Pledged Revenue Fund as soon as
possible
ibl
Debt Service Fund
Senior DSRF
DSRF
Subordinated Debt
Service Fund
To cure
deficiencies in
the other Trust
Agreement
g
 Under both the assessment bond
and
sales
tax
bond
trust
agreements,
surplus
revenues
released
from
either
the
assessment bond or sales tax bond
flow of funds are available to fund
g
shortfalls in either trust agreement
before remittance to the MBTA
General Fund
Subordinated DSRF
To Pay Prior
Obligations
Obli
ti
General Fund
To Pay MBTA Operating Expenses and Other Costs
*In
the event the Authority is otherwise unable to certify that it has provided payment for the Prior Obligations for the next fiscal year, payment of the Prior
Obligations is made prior to the deposits to the Senior Debt Service Fund
Slide 4
MBTA Draft FY2016 Capital Investment Program * and Financing
FUNDING SOURCE
Federal Funding Sources
Apportionment
Non-Apportionment
MBTA Sources
Revenue Bonds
Non
Revenue Bonds
Non-Revenue
State Sources
FY16
$480,332,525
45.9%
$225,476,425
21.6%
$340,237,500
32.5%
$352,523,585
$127,808,940
$168,806,991
$56
669 434
$56,669,434
Commonwealth Funding
$340,237,500
TOTAL SOURCES
$1,046,046,449
•The draft FY2016 CIP expects to be approved on June 29th Board meeting;
Source: MBTA Budget Department
1
Slide 5
Credit Profile – Sales Tax Debt
Debt Service Profile and Coverage Levels
Prior
Base
Obligations Net Sales Tax
Fiscal Year Revenue
Net Debt
Bonds Debt
(6/30)
Amount (1)
Service
Service
Coverage
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
2045
970,637,174
986,274,139
986,274,139
986,274,139
986 274 139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
986 274 139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
,
,
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
986,274,139
86,638,265
39,315,785
23,993,225
31,026,700
31 347 675
31,347,675
30,298,050
30,301,400
19,422,825
18,454,700
18,457,900
18,458,250
18 457 250
18,457,250
18,456,050
18,455,450
18,455,900
18,457,500
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
364,517,573
336,867,509
375,693,421
376,594,435
379
421 101
379,421,101
379,402,480
366,396,346
380,964,045
295,703,259
338,335,363
294,676,903
293
564 638
293,564,638
272,776,975
263,462,641
240,905,499
230,328,043
171,953,797
132,780,111
136,136,316
116,146,252
150,549,424
81,075,968
69,831,182
67,151,513
49,672,587
,
,
42,140,887
27,036,443
15,580,473
15,577,848
15,580,473
7,790,049
2.66
2.93
2.63
2.62
2
60
2.60
2.60
2.69
2.59
3.34
2.92
3.35
3
36
3.36
3.62
3.74
4.09
4.28
5.74
7.43
7.24
8.49
6.55
12.16
14.12
14.69
19.86
23.40
36.48
63.30
63.31
63.30
126.61
Prior Obligations Debt Service
1 200
1,200
S i S
l T
b S
i
Senior
Sales
Tax D
Debt
Service
Base Revenue Amount
1,000
800
600
400
200
0
2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045
Debt Service shown includes entire FY2015 Debt Service
Service. Debt service is net of federal subsidies.
subsidies Includes approx
approx. $91 million principal amount of Senior Sales Tax Bonds
Bonds,
2003 Series B that were optionally redeemed on March 5 and 19, 2008 from the proceeds of commercial paper.
(1) The Base Revenue Amount was reset to $970,637,174 starting in fiscal year 2015 and will be adjusted annually by the inflation index as required by Section 4 of Chapter
359 of the Acts of 2014. The BRA for FY2016 is $986,274,139.
1
Slide 6
Proforma New Money Debt Service and Coverage
• Senior Sales Tax Bonds, 2015 Series A
Proforma Debt Service Profile: MBTA Sales Tax Credit
$mm
400 Coverage
50.0
45.0
Summary of Proforma New Money Financing
Par Amount ($mm)
$190.0 Project Proceeds ($mm)
$200.0 40.0
40 0
300 35.0
30.0
200 DSRF Requirement ($mm)
Total Interest Cost (TIC)
$9.5 4.34%
25.0
25 0
20.0
Average Life (years)
27.9
Average Annual D/S FY2016 ‐20 ($mm)
$8.2 15.0
100 10.0
10 0
5.0
Average Annual D/S ($mm)
$14.7 2046
2044
2042
2040
2038
2036
2034
2032
2030
2028
2026
2024
2022
2020
2018
0.0
2016
0 Fiscal Year
Net D/S on Sales Tax Bonds and Prior Obligations
2015 New Money D/S
New Coverage
Note: Rates as of market close on June 24, 2015. Assumes FY2016 Base Revenue Amount of $986,274,139
Slide 7
P li i
Preliminary
Financing
Fi
i Schedule
S h d l
 Preliminary
y financing
g schedule:
 Preliminary Official Statement Posting: Week of August 17th
 Pricing: week of August 24th
 Pre‐Closing September 9th followed by Closing September 10th
5
Slide 8
2015 New Money Transaction
Financing Documents Execution
Document: General Certificate
Document: Specimen Bonds
Chair, MBTA Board of Directors
X
X
Manager MBTA
General Manager,
X
Deputy General Manager/Chief Financial Officer, MBTA
X
Signatory
X
X
General Counsel
Treasurer
Controller
Treasurer‐Controller
X
5
X
Slide 9