Metro Sells $115M of Bond for Vehicle Purchases

Metro sold $115,060,000 of bonds Aug. 11, with Cabrera Capital Markets and Citigroup as co-senior managers.  All-in total cost was 2.09 percent.

The bond proceeds will be used to purchase 150 new buses and to refund $60 million in commercial paper.  By refunding the commercial paper, Metro will be protecting itself from rising interest rates and will save approximately $340,000 in annual fees by consolidating commercial paper programs.

The order period generated approximately $375 million in orders from more than 20 institutional investors.  The buyers were mutual funds, trust accounts, insurance companies and private investors. 

This high level of demand by investors reflects confidence in Metro’s strong Aa2/AA+ credit rating resulting in a favorable borrowing cost when compared to other relevant issues in the market.