TIFIA and Private Sector Borrowers

1. TIFIA and Private Sector Borrowers TIFIA authority to deal directly with private borrowers always part of program design: 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.

2. TIFIA-assisted Projects (Credit Assistance in Millions) Staten Island Ferries $159 Paid in full Reno Rail Corridor $51 Paid in full Warwick Intermodal $42 Washington Metro CIP $600 SR 125 Toll Road $140 Cooper River Bridge $215 Refinanced Total TIFIA Assistance: $3.2 Billion Total Project Investment: $13.2 Billion LA-1 $66 Central Texas Turnpike $917 Tren Urbano $300 Paid in full 183-A $66 Miami Intermodal Center $439 Rental Car Facility 170 FDOT Program 269 Paid in full

3. 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:

4. 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.

5. 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.

6. Public/Private Concession Procurements Current TIFIA process assumes applicant already controls the project. • 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.

7. TIFIA Contact Information • TIFIA Joint Program Office (HCF-50) • U.S. Department of Transportation • Room 4310 • 400 Seventh Street, SW • Washington, DC 20590 • fax: (202) 366-2908 • http://tifia.fhwa.dot.gov • Mark Sullivan, Director (202) 366-5785 • mark.sullivan@dot.gov • Duane Callender (202) 366-9644 • duane.callender@dot.gov • Cheryl Jones (202) 366-0317 • cheryl.jones@dot.gov • Suzanne Sale (602) 379-4014 • suzanne.sale@dot.gov