Foothill/Eastern Transportation Corridor Agency Approves Plan to Refund Bonds for Significant Savings
Friday, December 11, 2020
The Foothill/Eastern Transportation Corridor Agency(F/ETCA) Board of Directors has approved plans to reduce debt service and save millions by refunding some of the Agency’s outstanding 2013A and 2013C bonds.
The refunding is estimated to save the F/ETCA in excess of $100 million without expending cash or extending bond maturity dates. The refunding would also enhance the Agency’s cash position, which is key given the uncertainties of COVID-19, but also allows the Agency flexibility to pay down other bonds early – something the Board has expressed interest in – or invest the savings in key capital projects.
“At the direction of our Boards and Debt Management Policies, we continuously look for opportunities to bolster our creditworthiness and capitalize on low interest rates, reduce debt payments and generate cash flow without extending bond maturity dates,” said Amy Potter, Transportation Corridor Agencies (TCA) chief financial officer.
Over the last five years, the F/ETCA has repeatedly taken actions to save nearly $500 million in interest without extending bond maturity dates. TCA’s debt is structured to follow conservatively projected revenues to ensure the Agencies can meet financial obligations while aggressively attracting traffic from congested highways and local streets."
“We owe it to our more than 2 million customers and the public at large to explore every opportunity to improve our strong financial position,” said TCA CEO Samuel Johnson. “This is yet another sound fiscal decision by our elected leaders, which has positioned the Agencies well for managing the pandemic while still supporting critical projects like Los Patrones Parkway and the Oso Parkway Bridge. Today’s decision allows the Board to consider future options for further reducing debt while advancing projects like the 241/91 Express Connector and keeps the Agency paving a path to success well into the future.”
TCA’s management strengths and long-term financial model have been recognized repeatedly by credit rating agencies including Standard & Poor’s, Fitch and Moody’s, which have rated all of TCA’s bonds as investment grade.
The Transportation Corridor Agencies (TCA) are two joint powers authorities formed by the California legislature in 1986 to plan, finance, construct and operate Orange County’s public toll road system comprised of the 73, 133, 241 and 261 Toll Roads.
Category: Partner News, transportation