ORLANDO, Fla., April 26, 2011 /PRNewswire/ -- A $245 million bond financing that enabled the Maryland Port Administration (MPA) to significantly increase the capacity of its Seagirt Marine Terminal has recently been named an infrastructure "Deal of the Year" for 2010 by both Infrastructure Investor and Project Finance. David Miller, Managing Director and head of PFM Group's Transportation Practice, announced that both publications cited the January 2010 offering of PFM's Financial Advisory client as an excellent example of an innovative transaction benefiting both the public and private sectors of the business. The deal allowed Ports America, one of the largest independent port terminal operators in the U.S., to join with the state of Maryland in a project that expanded the major container ship terminal at the Port of Baltimore.
"PFM's role as Financial Advisor to the MPA, a part of Maryland's Department of Transportation, was to determine both the financial feasibility and optimal structuring to meet MPA's economic goals and ensure an ongoing revenue stream," Mr. Miller said. "This deal highlights a way to shift some of the risk to the private sector while allowing the grantor - our client - to share in the benefits."
The project involves the construction of a new berth at the Seagirt Marine Terminal. Infrastructure Investor noted that the broadening of the Panama Canal is likely to bring larger container ships into the deepwater terminal at Baltimore, and the Port Administration wanted to be prepared. "The port will receive an annual rent payment, plus a fee for each cargo container moved at the terminal," they reported. The operator succeeded "by taking the long view in its partnership with the Maryland Port Administration," the award concluded.
Project Finance went even further, noting that "the deal highlights a way for port operators to raise cost-effective financing…Seagirt shows that with some creativity, it is possible to monetize assets in a way that (both) satisfies the public sector and gives the private sector a chance to prove its claim that it can be a more efficient operator."
"While the current pricing of municipal bonds vs. taxable ones favors Public Private Partnerships like this one, it was important to our client that the substantial equity investment by the private long-term leaseholder be structured into this transaction so that the private sector partner was accepting market risk, including economic fluctuations, in return for the long-term agreement to operate the terminal," Mr. Miller noted. The 50-year term also provided for a substantial upfront cash payment and revenue sharing to MPA on a regular basis.
The PFM Group was the top-ranked independent financial advisory firm in the nation in almost every major category at March 31, 2011, according to Thomson-Reuters, advising on more than $5 billion of total debt in 119 separate transactions during the first quarter of this year alone. Since its founding in 1974, PFM has provided independent financial advisory services to local, state, and regional government and non-profit clients throughout the United States in their dealings with the capital markets. Its Transportation Practice is one of the firm's most active, and also ranked first in number of transactions and their dollar amount for 2010. In fact, PFM has retained a long-term leadership position in Transportation, advising on $56.5 billion in 486 separate transportation-related transactions over the past ten years, according to the Bond Buyer/Securities Data Company figures. PFM Asset Management LLC (PFMAM), part of the PFM Group of Companies, is registered with the Securities and Exchange Commission under the Investment Advisers Act of 1940, and had $42.0 billion in assets under management as of March 31, 2011. In addition, it provided investment consulting services for an additional $19.9 billion in securities. The PFM Group of companies also provides best practices strategic consulting and pension advisory consulting services and currently employs more than 440 individuals serving a broad base of clients from locations in every region of the country.