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$1.4 Billion Refinancing Improves Long-Term Debt Structure for 73 Toll Road

TCA Spring 2011The San Joaquin Hills Transportation Corridor Agency has successfully refinanced $1.4 billion of its $2.2 billion in outstanding debt issued to fund construction of the 73 Toll Road.

“This is great news for drivers and the communities that surround the 73 Toll Road,” said Scott Schoeffel, Chairman of the San Joaquin Hills Transportation Corridor Agency, the joint powers authority responsible for financing the 73 Toll Road. “Refinancing improves the agency’s long-term financial health by lowering the annual debt service payments and improving financial flexibility.”

The bond issue was well received by the market with $2.5 billion in orders for a bond issue sized at $1.4 billion reflecting the 73 toll road’s performance, rating upgrade and confidence in the credit profile.

By taking advantage of the current low interest rates, and selling bonds with a nominal maturity of 2050 compared to the current 2042, the annual debt service growth is reduced from 8.8 to 1.7 percent over the next ten years. The interest rate on the restructured bonds averages 4.74 percent. The previous average was 5.72 percent – a reduction of nearly 100 basis points.

5809896002_b3709940fd_z“The combination of low interest rates, improved credit rating, and strong investor response resulted in a net present value savings of $44 million,” said Amy Potter, Chief Financial Officer for the Transportation Corridor Agencies.

“With this new long-term sustainable debt structure and conservative growth outlook for the 73 Toll Road, the agency will have greater financial flexibility moving forward which may allow the agency to moderate future toll rate increases, withstand economic downturns and potentially pay off the debt ahead of the 2050 final maturity date,” said Michael Kraman, Chief Executive Officer for the Transportation Corridor Agencies.

The sale is scheduled to close in early November and consisted of:

  • $1.1 billion in tax-exempt Senior Lien Current Interest Toll Road Revenue Bonds, with a 1.3-times coverage ratio requirement.

  • $300 million in tax-exempt Current Interest Junior Lien Toll Road Refunding Revenue Bonds, with a 1.1-times coverage ratio requirement.

Standard & Poor’s and Fitch Ratings have rated the agency’s Senior Lien Bonds BBB- and the Junior Lien Bonds BB+. Both ratings are higher than the agency’s previous ratings.

The Toll Roads Employees Help Santa

Holiday Gifts Thomas HouseFor the seventeenth year in a row, The Toll Roads’ employees have helped Santa get presents to families at the Thomas House Family Shelter.  Located in Garden Grove, Thomas House provides a safe, supportive environment and the resources necessary for homeless families with children to remain together while empowering them to become independent and self-sufficient.

Through The Toll Roads’ Santa’s Helpers Program, employees select a Thomas House resident to shop for based on that person’s wish list.  Employees shop during their off hours using their own money and, in total, usually purchase gifts for 40 to 60 adults and 15 to 20 children.

“This year, I was a Santa’s Helper for a one year old who wanted anything Disney, so I bought a large stuffed Mickey Mouse, Minnie Mouse sippy cup and fuzzy slippers.  I look forward each year to buying a gift for a child who is far less fortunate than my own.  When wrapping the gift, I think of the smile on his or her face and the excitement they must feel when opening what I wrapped,” said The Toll Roads employee Bill.

Holiday Gifts Thomas House Gift Tag“My family has participated in the Santa’s Helper Program for over six years now.  The reward is not only the spirit of giving, but having my grandchildren contribute in, both, the selection of the gift and a contribution of a few coins from their own savings.  It’s everyone working together to bring joy,” said The Toll Roads employee Tom.

“I picked a little girl who is four years old and loves Minnie Mouse.  She had a Minnie Mouse tea set and anything Minnie Mouse on her wish list.  I purchased the tea set and a plush Minnie dressed in pink. I was drawn to this little girl because I recently got a new puppy named Mini!” said The Toll Roads employee Linda.

Each year the Santa’s Helpers Program is spearheaded by The Toll Roads employee Dale.  All of Santa’s Helpers count on her to be the lead elf and are thankful for the work she does to get gifts and holiday cheer to those in need.