The Macquarie-led Kentucky Wired P3 reached financial close on 3 September.
Financial close occurred following the pricing of the USD 232m in tax exempt bonds on 27th August. The transaction included a 3 September private placement of USD 58m in taxable bonds.
The taxable bonds priced at 4.64%. The tax-exempt bonds have a blended rate of 4.66%.
The Series 2015B bonds were privately placed and divided into two separate bonds. The first is a USD 19.5m Series 2015B-1 bond that was issued and purchased at financial close. Another USD 38.5m Series 2015B-2 bond will be issued on a deferred basis.
Allianz Life Insurance Company of North America will purchase the Series 2015B bond under a forward bond purchase agreement.
The sponsors purchased USD 15m in Series 2015C subordinate revenue bonds.
BAML and Barclays are the underwriters. Moody’s and Fitch have assigned ratings of Baa2 and BBB+ to the bonds.
Macquarie NG-KIH Holdings (75%), Ledcor (15%) and First Solutions (10%) are the equity participants. The total subordinated capital, which includes junior debt plus equity, is USD 21m.
A groundbreaking ceremony took place in Hazard, Kentucky on 31 August.
Kentucky Gov. Steven Beshear noted that the project would have taken years, if not decades, had the project relied on public funding alone.
“Those kinds of tax dollars just aren’t available,” Gov. Beshear said in a statement.
Marc Lemon of Polsinelli and lead counsel for the Commonwealth noted that the project is the first of its kind in the US. “I look forward to implementing this blueprint in other states,” he added.
"Macquarie is proud to be working with the Commonwealth in this ground breaking application of the P3 model to the delivery of broadband connectivity to the government, schools and citizens of Kentucky," said Nick Hann, Executive Director Infrastructure at Macquarie Group.
Grantor legal advisor - Polsinelli
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