Massachusetts Port Authority Subordinated Obligations, Crane Financing and Commercial Paper Notes

Transcription

1 Massachusetts Port Authority Subordinated Obligations, Crane Financing and Commercial Paper Notes TEFRA Hearing April 11, 2018

2 1. Overview of Conley Terminal Berth 10 & Cranes and other Maritime improvements 2. Series 2018-A: 2018 Subordinated Obligations $107.5 million Berth 10 $45 million Ship to Shore Cranes 3. Series 2012-B: $50 million Tax Exempt Commercial Paper Notes 4. Timeline 2

3 Project Overview Construction of certain additional extensions, enlargements and improvements to Berth 10 at Conley Terminal and the acquisition of 3 Cranes and other certain capital improvements at Maritime facilities Project Costs The Authority intends to enter into a Memorandum of Understanding with the Commonwealth of Massachusetts ( MOU ) The Commonwealth would provide grant funds totaling $107.5 million ( Commonwealth Funds ) to fund a portion of project costs The Authority intends to acquire 3 ship to shore cranes for approximately $45 million Up to $50 million in other certain capital improvements at Maritime facilities, including but not limited to: the dedicated freight corridor serving Conley Terminal, Cruise Terminal seawall reconstruction and Conley Terminal improvements for bulkhead and apron repairs at Berths 11 and 12 and racks for refrigerated containers 3

4 Project Timing Funding is needed prior to the anticipated receipt of the Commonwealth Funds in order to undertake and complete the project in an expeditious manner and permit accommodation of neo-panamax container ships at Conley Terminal For this reason, the Authority must provide initial financing of the improvements to be repaid later upon receipt of the Commonwealth Funds 4

5 Harbor Dredging ($350M) New Berth 10 and 3 New Cranes ($215M project with $107.5M from Economic Development Bill) Dedicated Freight Corridor ($75M) Note: Additional $100M required to expand container yard to Coastal Oil site and purchase/upgrade yard equipment. 5 Existing Terminal ($103M project with $42M from FASTLANE Grant)

6 Project Overview This project will construct a new berth at the former Coastal Oil Site and acquire three cranes to serve next generation container ships $107.5 million in State funding, a 50% match to Massport funds 1,275 linear feet of new berth New state of the art bollards and fenders Three new 22 container wide Ship to Shore cranes Remediation of historic oil contaminated soils via In-Situ Stabilization Construction of a new Conley Terminal substation to support electrical draw from new cranes A/E Contractor Project Facts GEI Consultants TBD Cost $215 Million (Berth 10: $170 Million & Cranes: $45 Million) Duration July 2018 to July

7 1.) Use of Subordinated Obligations Proceeds New Money (AMT): 2018-A Design and Construction of Berth 10 $ 107.5M Acquisition of 3 STS Cranes $ 45.0M Total $ 152.5M 2.) Use of Commercial Paper Program: 2012-B Dedicated freight corridor serving Conley Terminal $ 3.5M Cruise Terminal seawall reconstruction $ 2.0M Bulkhead and apron repairs at Berths 11 and 12 at Conley Terminal $ 6.5M Racks for refrigerated containers ( reefer racks ) at Conley Terminal $ 2.9M Other capital expenditures relating to Conley Terminal and the $ 35.1M Cruise Terminal Total $ 50.0M 7

8 PFM Recommendation Issue $107.5 million in New Money Subordinated Obligations Level annual debt service, amortized from July 1, 2023 to July 1, 2028 Massport to solicit bids from qualified banks and financial institutions to result in: Lowest cost of borrowing Most favorable terms Greatest flexibility Mitigate the Authority s exposure to risk 8

9 February Board adopts Subordinated Obligations Resolution February 15, 2018 [April] Distribute Direct Placement RFP [ TBD ] [May] Direct Placement RFP Due [ TBD ] 9

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12 Industry Conley Terminal Pre-2014: 2,700 to 5,100 TEUs Nov. 2014: MSC Judith 8,000 TEUs Jun. 2015: COSCO Napoli 8,200 TEUs Apr. 2016: COSCO Africa 8,500 TEUs Apr 2018: COSCO Development 13,000 TEUs Courtesy of AAPA Courtesy of 12

13 Project Overview The Boston Harbor Maintenance Dredging and Deep Draft Navigational Improvement Project will provide significant economic and environmental benefits to the Port of Boston, Commonwealth of Massachusetts and the New England Region, and will allow Conley Terminal to continue to compete for cargo business on Neo-Panamax container ships in the future. The Project s scope includes: The construction of a Confined Aquatic Disposal Cell (CAD Cell) beneath Upper Main Ship Channel Maintenance dredging (to Elev. -40ft MLLW) of roughly 1.2 million cubic yards of material from channels in the Upper Harbor with placement in the CAD Cell Improvement dredging (to Elev. -47ft MLLW in the Main Ship and Reserved Channel, and -51ft MLLW in the Outer Harbor) of roughly 11 million cubic yards of material, including approximately 500,000 cubic yards of rock, and expansion of the turning basin Dredging of over 300,000 cubic yards of sediment for CAD Cell and offshore disposal A/E Contractor Cost $327M Project Facts US Army Corps of Engineers Maintenance Dredging: Great Lakes Dredging & Dock Improvement Dredging: Contract Award in Process Duration July 2016 to July