Case Study

Dallas Area Rapid Transit (DART)


  • $576,355,000 Senior Lien Sales Tax Revenue Refunding Bonds, Taxable Series 2021A
      • Taxable advance refunding
      • $96.2M NPV savings or 18.6%
      • 10-year par call
      • Serial maturities through 2036
      • Index-eligible term bond in 2048
      • Escrow funded with OMS
      • 89 unique investors
  • $448,965,000 Senior Lien Sales Tax Revenue Refunding & Improvement Bonds, Series 2021B
      • $500M new money for Silver Line
      • Structured on the backend as term bonds due 2047 and 2051 to take advantage of debt profile
      • Small current refunding of outstanding TIFIA bonds

Estrada Hinojosa has served DART as financial advisor since 2001, serving much of that time as lead co-FA or sole FA. During this period, we have helped them complete 24 long-term bond transactions for a combined par value of over $9.0 billion. Transactions have included Build America Bonds, 40-year amortization, insured and uninsured, open market and SLGS escrows, various types of refundings including forward delivery, a “Cinderella” transaction, public sales and private placements, various call features including make-whole, and an exchange tender.

Federal Loan Programs

$105 million TIFIA Loan in 2012

$908 million RRIF Loan in 2018/2021

  • Rate of 2.91%
  • Initial rate of 2.98% for 2018 loan
  • Refunded in 2020 and 2021 for savings
  • Renegotiated rate at 2.26% in 2021
  • Included TIGER grant for credit subsidy
  • Senior lien parity obligations
  • Senior lien parity obligations
  • Funds will be drawn down over time
  • Using as hedge for CP programs


Commercial Paper Programs
$125 million self-liquidity

Series I

$125 million JPMorgan bank-backed

Series IIA-B

$125 million Morgan Stanley extendible CP

Series III

  • Initially established in 2013
  • Series IIA is traditional CP
  • No liquidity fees
  • No more than $35 million in 5 days
  • Series IIB is direct placement tranche
  • Trades at slight spread over traditional CP
  • 2X coverage on available haircut funds


DART – DFW Terminal A Station

The Paragraphs below illustrate some of our past work for DART.

2021 Transactions:

  • $130.47 Series 2020A – new money for Silver Line and TIFIA refunding
  • $32.06 Series 2020B – forward delivery tax-exempt refunding
  • $115.22 Series 2020C – taxable advance refunding
  • $281.09 Series 2020D – taxable advance refunding

In October 2016, we began work again on the proposed Cotton Belt commuter rail line. The Cotton Belt has been part of DART’s long range financial plan for over two decades. Although we had worked with DART on the project several times previously, other commitments and lagging sales tax revenue during the financial crisis made the project not financially feasible. With many of DART’s major projects now complete and significant increases in sales tax revenues realized, DART has now committed to have the rail line under construction in 2018. The project will likely include multiple financing instruments including a Railroad Rehabilitation & Improvement Financing (RRIF) loan from the Federal Railroad Administration and possibly vendor financing of rolling stock. The RRIF loan is expected to be approved in the fall of 2018. We are also currently assisting DART with the financing of its downtown Dallas second alignment project (D2) as well as a refunding of callable BABs issued in 2009.

In September 2016, we helped DART complete a public market sale of refunding bonds. The transaction was completed by a syndicate of 6 underwriters. The $228.9 million sale netted DART over $44 million in NPV savings.

In February 2016, we helped DART complete a public market sale of refunding bonds. The transaction was completed by a syndicate of 13 underwriters. Open market securities were used in the escrow. The $482.53 million sale netted DART over $47 million in NPV savings.

In December 2015, we assisted DART with a privately-placed $117.47 million “Cinderella” refunding. The transaction refunded bonds that were not eligible for an advance refunding. The Series 2015 bonds are set at a taxable rate during the first year until the bonds are eligible for a current refunding at which time they will convert to a tax-exempt rate and be “reissued”. As part of the transaction we analyzed various other strategies including issuing taxable debt and tax-exempt forward delivery bonds.


In 2014, we assisted DART with a $379.48 million refunding transaction and a privately-placed $46.55 million “exchange” refunding. The exchange refunding was placed with the owner of the refunded bonds and afforded DART debt service savings in exchange for an extension of the call date.

DART Rail and DCTA A-train at Trinity Mills Station

In the fall of 2012, we also assisted DART with the issuance of its $119.972 million Senior Lien Sales Tax Revenue Bonds, Taxable Series 2012A. The 2012A bonds were the instrument used to consummate a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan from the US Department of Transportation. The 2012A bonds were used for the Irving 3 section of the new Orange Line from Irving to Terminal A at DFW Airport and were drawn down over approximately 14-18 months as construction needs dictate.

Throughout 2011 and 2012, we worked with DART on a host of pressing issues to include the completion of a successful bond validation lawsuit. Upon the successful completion of the Series 2012 bond sale, DART cancelled its credit facility which was providing liquidity support for its commercial paper program. A new tranche of CP became effective on May 1, 2013 which replaced bank-backed liquidity support with self-liquidity from DART (CPSL). The new Series I notes, which received the highest short term ratings from Moody’s and S&P, were authorized up to $150 million with no more than $35 million maturing within 5 days. The self-imposed parameters, documented in a new CPSL Plan which we authored, allowed DART to effectively utilize its own balance sheet to avoid liquidity fees while at the same time avoid unduly restricting itself. In 2014, we help DART expand this program to $200 million.

DART Addison Transit Center

In the fall of 2010, Estrada Hinojosa assisted DART with the issuance of their $95,235,000 Senior Lien Sales Tax Revenue Refunding Bonds, Series 2010A and their $729,390,000 Senior Lien Sales Tax Revenue Refunding Bonds, Taxable Series 2010A (Build America Bonds).  The tax-exempt 2010A refunding bonds were issued for debt service savings and moderate restructuring. The 2010A bonds achieved NPV savings of $7.2 million or 7.0% while also providing significant cash flow relief in FY 2012 and 2013.  The escrow was funded with open market securities. The Series 2010B bonds funded additional expansion of DART’s light rail system.

In the summer of 2009, we served as the sole financial advisor for the issuance of $1 billion Sales Tax Revenue Bonds, Series 2009A & Taxable Series 2009B (BABs). The issue was divided between a $170,385,000 tax-exempt series, and a $829,615,000 taxable Build America Bonds series, one of the largest Build America Bond issues in the Southwest. The financing was structured to provide the lowest possible cost to DART and included BABs that are callable with a 10-year par call and BABs that are subject to a make-whole call.