April 26, 2007 Atlanta, Georgia The Focus Georgia Conference: Transportation Funding Solutions for...
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Page 2 TIFIA and Private Sector Borrowers In 2003, $140 million subordinate loan to Macquarie for South Bay Expressway, in conjunction with senior loans from banking consortium and equity from private developer. In 2006, received application to refinance a portion of Transurban’s acquisition debt for the Pocahontas Parkway in order to construct the Richmond Airport Connector. In 2006, agreed to provide conditional assistance to competing concessionaires for Texas CDA Projects including SH-121. TIFIA authority to deal directly with private borrowers always part of program design:
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Transcript of April 26, 2007 Atlanta, Georgia The Focus Georgia Conference: Transportation Funding Solutions for...
Page 2
TIFIA and Private Sector Borrowers
In 2003, $140 million subordinate loan to Macquarie for South Bay Expressway, in conjunction with senior loans from banking consortium and equity from private developer.
In 2006, received application to refinance a portion of Transurban’s acquisition debt for the Pocahontas Parkway in order to construct the Richmond Airport Connector.
In 2006, agreed to provide conditional assistance to competing concessionaires for Texas CDA Projects including SH-121.
TIFIA authority to deal directly with private borrowers always part of program design:
Page 3
Total TIFIA Assistance: $3.2 Billion
Total Project Investment: $13.2 Billion
Reno RailCorridor
$51Paid in full
SR 125Toll Road
$140
Staten Island Ferries
$159Paid in full
Tren Urbano $300
Paid in full
WashingtonMetro CIP
$600
Miami Intermodal Center$439
Central TexasTurnpike
$917
Cooper RiverBridge$215
Refinanced
WarwickIntermodal
$42
183-A$66
LA-1$66
TIFIA-assisted Projects (Credit Assistance in Millions)
Rental Car Facility
170
FDOT Program269
Paid in full
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TIFIA’s Flexible Credit Terms
35-plus-year, fixed-rate debt for up to 33 percent of project costs
‘AAA’ taxable interest rate for sub-investment grade debt
Rate is ‘locked’ upon execution of credit agreement
Loan proceeds drawn only when needed
Debt service can be ‘sculpted’ to meet expected cash flow
No pre-payment penalty
TIFIA lien is effectively subordinated
TIFIA provides loan structuring advantages to borrowers:
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TIFIA Loans – Notable Features
Innovations utilized by TIFIA borrowers include:
Short-term (lower-cost) construction financing taken out with TIFIA loan, with no interest rate risk.
Alternate debt service schedules, lessening possibility of payment default in event of underperformance.
No fixed principal amortization schedule. Principal retired from annual surplus funds, using Project Life Cover Ratio as confirmation of ultimate recovery and trigger for contingent revenue increases.
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TIFIA and Co-Investors
TIFIA loan structure is cognizant of debt and equity investors:
Federal Government is a ‘patient investor’ – when project economics require it.
Negative amortization of TIFIA loan is allowed – but not when senior lenders are reducing their investment.
Equity in a project financing should be a very patient investor.
An extremely profitable project should expect to retire its TIFIA loan early.
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Public/Private Concession Procurements
When public entity seeks binding financial proposals from competing private ventures, each of which intends to seek TIFIA, should DOT…
Offer uniform terms and conditions, upfront, to every concessionaire?
Work with each competitor, simultaneously and confidentially, to structure concessionaire-specific debt alternatives?
The TIFIA experiment (“SEP-15”) with Texas CDA Projects provides the former, within the context of TxDOT solicitations.
Current TIFIA process assumes applicant already controls the project.
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TIFIA Joint Program Office (HCF-50)U.S. Department of TransportationRoom 4310400 Seventh Street, SWWashington, DC 20590
fax: (202) 366-2908
http://tifia.fhwa.dot.gov
Mark Sullivan, Director (202) [email protected] Callender (202) [email protected] Jones (202) [email protected] Sale (602) [email protected]
TIFIA Contact Information
