Bridge Commission Refinances $60 million of Debt

The Halifax-Dartmouth Bridge Commission has refinanced $60 million of debt, maturing later this year, through a loan arrangement with the province.

"The goal is to minimize the cost of financing the bridges," said Michael Baker, Minister of Finance and minister responsible for the Halifax-Dartmouth Bridge Commission. "This represents good management of public money."

The Toll Revenue Bonds Series 1 was issued in 1997 to fund projects including construction of the Barrington Street ramp and the third lane for the Angus L. Macdonald Bridge. The bond issue comes due on Dec. 4, 2007.

Working through the province, the commission gets a better interest rate for the next 12 years and avoids extra administrative and financing costs.

Under the financing agreement approved this week, the Department of Finance will take on the loan, and the commission will repay a portion of the principal to the province on Dec. 4 of each year, starting in 2008, until final maturity in December 2019. The average interest rate for the new loan will be 5.13 per cent over the 12-year period.

The balance of the commission's $106 million gross debt will be paid from funds accumulated for that purpose over the past eight years.

"We have reduced the bridge commission's debt from $123 million to $60 million over the last eight years," said Tom Calkin, chair of the Halifax-Dartmouth Bridge Commission. "This refinancing continues that progress, and will help us reduce interest costs in the future."

The commission is currently rated AA (low) by Dominion Bond Rating Service and A+ (positive outlook) by Standard and Poors Rating Agency.

The commission is a financially self-supporting entity that reports to the Nova Scotia Legislature through the Minister of Finance. It is responsible for all maintenance, operating and administration costs associated with the Angus L. Macdonald Bridge and the A. Murray MacKay Bridge.

Revenue is derived from tolls to vehicles crossing the bridges and additional revenue from other utilities which have installed waterline and cables across the bridges.