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Los Angeles County MTA (CA)



Proposition C Sales Tax Revenue Bonds Senior Bonds, Series 2019-A (Green Bonds) & 2019-B

February 6, 2019


Image by Sam Mgrdichian

Winner of the Bond Buyer ESG/Green 2019 Deal of the Year Award

The second largest green deal in 2019, and the second largest green offering in California history

In November, this transaction was awarded the inaugural Bond Buyer ESG/Green 2019 Deal of the Year Award, becoming one of the ten award winners eligible to win the Deal of the Year award in December.

Transaction Summary

Siebert Cisneros Shank Los Angeles County Metropolitan Transportation Authority’s, Proposition C Sales Tax Revenue Bonds Senior Bonds, Series 2019-A (Green Bonds) and Series 2019-B on February 5 and 6, 2019.

Proceeds from the Series 2019AB Bonds will be used to finance the development and construction of certain projects of the rail, bus and highway transit system, including, with the proceeds of the Series 2019-A Green Bonds, projects that have been identified as environmentally beneficial.

The Series 2019A&B Bonds are secured by 80% of the half-cent Proposition C Sales Tax revenues on all taxable sales in the County of Los Angeles. The Bonds were structured with a 5-year deferred principal level debt service through 2044 (25 years) to minimize upfront aggregate Prop. C debt service and maximize debt service coverage. The Bonds were rated Aa2/AAA/AA+ with an upgrade by S&P from AA+ to AAA.

As of the October 2019, this transaction represented one of the largest green bond transactions in 2019. (Source for rankings: Thomson Reuters)

  • 2nd largest green bond deal in California in 2019

  • 4th largest green bond series issued in the USA IN 2019 (Series 2019-A)

  • 6th largest green bond deal in the USA in 2019

LACMTA’s Commitment to Sustainability
LACMTA is committed to advancing regional sustainability by providing safe, affordable, equitable, and environmentally-friendly transit and has long been committed to a variety of environmental goals.

In 2008, LACMTA adopted a Sustainability Implementation Plan which addressed sustainability through climate change management, energy management, and other sustainability development efforts.

LACMTA was the 2nd California transit agency to obtain third-party climate bond certification.
In November 20, 2018, LACMTA created its Revised Framework for Green Bonds, which contained the environmental objectives of LACMTA and outlines the process of selection and evaluation of projects nominated to be funded by green bonds as well as the application and management of proceeds.

In April 2019, Los Angeles Mayor Eric Garcetti announced the launched the City’s Green New Deal. Today, LACMTA’s environmental goals have evolved to include reducing greenhouse gas emissions in its facilities, operations and construction activities within its service area, as well as the impact of any ancillary activities on human health and the environment.

As such, LACMTA’s Series 2019-A is Climate Bond Certified and conforms with the Climate Bond Standards Board’s Low Carbon Land Transport Sector-Specific Criteria

Pricing Results
As a result of SCS’s strong pre-marketing effort and aggressive pricing strategy, the transaction received $1.176 billion orders and the bonds were over 2.2x oversubscribed.

The Series 2019-A Green Bonds received $996 million orders and were 2.4x oversubscribed. The 20-year maturity (due in 2039) was 3.7x oversubscribed.

During the retail order period on February 5th, $128 million retail orders were received from California buyers. 54 accounts submitted orders including 31 new accounts who were not reported as current holders of LACMTA’s bonds. In addition, 14 existing LACMTA holders submitted orders and 21% of the investors who viewed the investor presentation submitted orders.

LACMTA achieved 60% bond holder consent to pass an amendment which allowed it to issue future Prop. C Sales Tax bonds without a reserve fund.

Overall, the transaction priced successfully and lower than any of Metro’s Prop. C issuances in the past 6 years, by at least 2 to 22 basis points, depending on the maturity.

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