The Texas Department of Transportation recently announced that it had achieved the largest savings on a single bond deal in the state’s history through a $1.68 billion refinancing that priced Jan. 21.
The bond issue refinanced almost all of the outstanding debt for the Central Texas Turnpike System (CTTS), first issued in 2002. The deal will end up saving $380 million in terms of present value—more than 21 percent of the amount of debt refinanced.
The total savings will be $938 million on a gross basis, with the savings starting in fiscal year 2026.
Texas Transportation Commissioner Jeff Austin III called the refinancing effort a significant win for the state.
“Over the long term, this is ultimately almost a billion dollars that will be used for roads, bridges and other transportation projects rather than paying off bond debt. We talk about being good stewards of taxpayers’ money, and the TxDOT finance team has walked that talk in a very significant way,” Austin said in a prepared statement.
TxDOT benefitted from historically low interest rates that saw overall borrowing cost at 4.09 percent for debt with an average life of 21.4 years.
Thanks to the refinancing TxDOT paid off a $900 million Transportation Infrastructure Finance and Innovation Act (TIFIA) loan for CTTS, which is the the largest TIFIA loan repaid to date.