CHICAGO -- The Ohio Turnpike Commission is preparing a $125 million bond issue for capital improvements that will mark its first new-money issue since 1952.

The commission expects to sell the bonds, back by toll revenues, in February, according to commission spokesman Joe Rice.

The capital program to be funded by the bond issue will include eight new interchanges on the 241-mile turnpike that runs from the Pennsylvania border to the Indiana border as well as other improvements, Rice said.

"The whole thing is to use the turnpike to increase access and improve the business climate," he said.

Gordon Reis 3d, partner at Seasongood & Mayer, the financial adviser for the deal, said the proceeds from the issue will be used not only to fund new projects but to repay $70 million already spent by the commission on new interchanges. The commission's reserve fund paid for the capital expenditures, made since September 1992, Reis said.

He said the commission, in accordance with federal tax law, has passed resolutions declaring its intention to replace spent reserve funds with bond proceeds.

Reis also said the turnpike may issue more debt beyond the $125 million bond sale planned for next year.

In the past, the commission used available revenues to improve the turnpike, which was built with the proceeds from a $326 million revenue bond issue sold in 1952.

Those bonds were paid off in June 1992. Future bond issuance, however, would have been prohibited by federal and state laws once the old debt was retired. The lifting of tolls at that time was also required by state law.

But James McGrath, the commission's general counsel, said that a 1991 amendment to state law and changes included in the federal Intermodal Surface Transportation Efficiency Act of 1991 allowed the turnpike to continue to collect tolls and issue debt.

Reis said the Turnpike Commission will probably seek ratings from all three rating agencies. The turnpike had been rated double-A by Moody's Investors Service and Standard & Poor's Corp. in the early 1980s, when the turnpike privately placed a $4.8 million refunding of the 1952 debt.

The commission on Monday selected underwriters for the new bond issue.

PaineWebber Inc. will be the issue's bookrunner, with co-senior managers being Bear, Stearns & Co. Inc.; Donaldson, Lufkin & Jenrette Securities Corp.; CS First Boston; Kemper Securities Inc.; Lehman Brothers; McDonald & Co. Securities Inc.; and the Ohio Company.

Co-managers will be Artemis Capital Group; Banc One Capital Group; M.R. Beal & Co.; J.C. Bradford & Co.; Brooks Securities Inc.; Chase Global Securities Inc.; A.G. Edwards & Sons Inc.; Goldman, Sachs & Co.; Huntington Corp.; Kidder, Peabody & Co.; J.P. Morgan Securities Inc.; Prudential Securities Inc.; and Pryor, McClendon, Counts & Co.

The commission had sent out a request for proposals for underwriters in April, Rice said. The commission had selected Cincinnati-based Peck, Shaffer & Williams as bond counsel earlier in the year, he said.

About 36 million vehicles traveled the Ohio Turnpike in 1992, raising $95.6 million in tolls and other revenues for the commission.

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