WHAT YOU DIDN’T KNOW TO ASK ABOUT PROJECT FINANCING Project Finance, Debt & Strategic Contracts Division October 11, 2016
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WHAT YOU DIDN’T KNOW TO ASK ABOUT PROJECT FINANCINGProject Finance, Debt & Strategic Contracts Division
October 11, 2016
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TxDOT Financing Programs Administered by PFD
3
Other
Financing
Programs
Statewide
Debt
Funding
Programs
Texas Mobility Fund General Obligation Bonds (TMF)
State Highway Fund Revenue Bonds (SHF/Prop 14)
Highway Improvement General Obligation Bonds (HIGO/Prop 12)
TxDOT is the Borrower
Cash Management Program
Private Activity Bonds
TIFIA Loan Program
Toll
Revenue
Financing
Enterprises
Central Texas Turnpike System Toll Revenue Bonds (CTTS)
Grand Parkway System Toll Revenue Bonds (GPTC)
I35E Managed Lanes Project (in process)
SH 183/Midtown Express Managed Lanes Project (in process)
TxDOT is the Lender
State Infrastructure Bank Loan Program
Toll Equity Program
Other
Pass-Through Financing Program
Transportation Reinvestment Zones
Texas Mobility Fund General Obligation
Bonds (TMF)
Debt Programs that Provide Statewide Funding
4
Approved by voters in 2001 under
Proposition 15
Bonding capacity is currently limited to
$7.4 billion
Bonds are repaid by the revenues
currently dedicated to the fund:
driver license fees,
vehicle inspection fees,
certificate of title fees and
driver record information fees
Bonds also carry the State’s general
obligation pledge
Highest Bond Credit Ratings:
Aaa/AAA/AAA by Moody’s/S&P/Fitch
State Highway Fund Revenue Bonds
(SHF/Prop 14)
Texas Mobility Fund General Obligation
Bonds (TMF)
Debt Programs that Provide Statewide Funding
Approved by voters in 2003 under
Proposition 14
Bonding capacity is limited to $6
billion total issuance;
of that $1.2 billion dedicated to
safety projects
Bonds are repaid with the revenues
of the State Highway Fund which
include among others:
state motor fuel tax,
motor vehicle registration fees,
federal reimbursements
Highest Bond Credit Ratings:
Aaa/AAA by Moody’s/S&P
5
Approved by voters in 2001 under
Proposition 15
Bonding capacity is currently limited to
$7.4 billion
Bonds are repaid by the revenues
currently dedicated to the fund:
driver license fees,
vehicle inspection fees,
certificate of title fees and
driver record information fees
Bonds also carry the State’s general
obligation pledge
Highest Bond Credit Ratings:
Aaa/AAA/AAA by Moody’s/S&P/Fitch
State Highway Fund Revenue Bonds
(SHF/Prop 14)
Highway Improvement General
Obligation Bonds (HIGO/Prop 12)
Texas Mobility Fund General Obligation
Bonds (TMF)
Debt Programs that Provide Statewide Funding
Approved by voters in 2003 under
Proposition 14
Bonding capacity is limited to $6
billion total issuance;
of that $1.2 billion dedicated to
safety projects
Bonds are repaid with the revenues
of the State Highway Fund which
include among others:
state motor fuel tax,
motor vehicle registration fees,
federal reimbursements
Highest Bond Credit Ratings:
Aaa/AAA by Moody’s/S&P
6
Approved by voters in 2007 under
Proposition 12
Bonding capacity is limited to $5
billion total issuance
Bonds are repaid with the State’s
general revenues
All but about $700 million has
been issued
Highest Bond Credit Ratings:
Aaa/AAA/AAA by
Moody’s/S&P/Fitch
Approved by voters in 2001 under
Proposition 15
Bonding capacity is currently limited to
$7.4 billion
Bonds are repaid by the revenues
currently dedicated to the fund:
driver license fees,
vehicle inspection fees,
certificate of title fees and
driver record information fees
Bonds also carry the State’s general
obligation pledge
Highest Bond Credit Ratings:
Aaa/AAA/AAA by Moody’s/S&P/Fitch
PFD manages more than $18 billion in program debt
Toll Revenue/Project Financing Enterprises
Toll Revenue Financings –the commission may issue debt secured by the revenues of a toll project
or system. To date, the commission has issued the following toll revenue system obligations:
7
In 2002, $2.2 billion in debt issued to
finance construction of CTTS
Elements: SH 130 segments 1-4, SH 45N, SH
45SE and Loop 1.
Credit ratings (Fitch/Moody’s/S&P):
First Tier bonds: A-/A3/A-
Second Tier bonds: BBB/Baa1/BBB+
As of August 31, 2016 there was $2.7 billion
in principal outstanding system debt.
Central Texas Turnpike System Revenue Bonds
Toll Revenue/Project Financing Enterprises
Toll Revenue Financings –the commission may issue debt secured by the revenues of a toll project
or system. To date, the commission has issued the following toll revenue system obligations:
8
In 2002, $2.2 billion in debt issued to
finance construction of CTTS
Elements: SH 130 segments 1-4, SH 45N, SH
45SE and Loop 1.
Credit ratings (Fitch/Moody’s/S&P):
First Tier bonds: A-/A3/A-
Second Tier bonds: BBB/Baa1/BBB+
As of August 31, 2016 there was $2.7 billion
in principal outstanding system debt.
In 2013, $2.9 billion in debt issued to finance
construction of Grand Parkway
Specifically segments E, F1, F2 and G
A portion of that debt will be replaced with an
$841 million TIFIA loan.
Credit ratings (Fitch/S&P):
BBB+/BBB (non-TELA bonds)
AA-/AA+ (TELA bonds)
As of August 31, 2016, there was $3.0 billion
in principal outstanding system debt.
Central Texas Turnpike System Revenue Bonds Grand Parkway System Toll Revenue Bonds (GPTC)
PFD manages almost $6 billion in enterprise debt
$0
$50
$100
$150
$200
$250
$300
$350
$400
$450
$500
$550
$600
$650
$700
$750
$800
$850
$900
2015 2020 2025 2030 2035 2040
Pro Forma First Tier Debt Service
Pro Forma Second Tier Debt Service
Projected O&M
Projected Capital Expenditures
Forecast Pledged Revenues
CTTS Enterprise Debt Service Profile
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Millions
Pro Forma Revenue and Debt Service
Grand Parkway System Flow of Funds
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1. Gross Revenue
2. Senior Operation and Maintenance Fund
3. First Tier Debt Service Fund (Interest & Redemption Accounts)
4. First Tier Debt Service Fund Reserve Account
5. Second Tier Debt Service Fund (Interest & Redemption Accounts)
6. Second Tier Debt Service Fund Reserve Account
7. Subordinate Tier Debt Service Fund (Interest & Redemption Accounts)
8. Subordinate Tier Debt Service Fund Reserve Account
9. Junior Operation and Maintenance Fund
10. Operation and Maintenance Reserve Fund
11. TELA / Other Tier Obligations Payment Fund
12. Rate Stabilization Fund
13. Major Maintenance Fund
14. Grand Parkway Enhancement Fund
Senior Net Revenues
Junior Net Revenues
TELA Supported Junior Operating Expenses for
Segments D, E, F-1, F-2, and G
Repayments under the TELA
TELA supported bonds
(Rated AA+ / AA-)
TIFIA loan will be a Second Tier Obligation
First Tier bonds are not TELA supported
(Rated BBB- / BBB)
Summary of Key Agreements Related to Grand Parkway
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Zachry
Odebrecht for
D-G,
TBD on H&I
Various
Contractors
TransCore
T
x
D
O
T
Grand Parkway
Transportation
Corporation
Grand Parkway
System
Assignment of D-B Contract, D-B-B
Contracts, CMAs and applicable
portion of Toll Integration Agreement
Project Agreement
(Segments D, E, F-1, F-2 and G)
(Segments H&I to come)
Assignment of
System Revenues
Toll Equity Loan
Agreement (“TELA”)Toll Integration Agreement
(Statewide Agreement)
Four Design-Bid-Build
Contracts
(Segments D & E)
Capital Maintenance
Agreement
(Segments F-1, F-2 and G)
CMA
(Segments H&I)
Design-Build Contracts
Harris, Brazoria, Chambers, Fort Bend,
Galveston, Liberty and Montgomery Counties
Market Valuation Waiver Agreement
Toll Rate Agreement The
Commission
1st Tier
Bond
Investors
TIFIA
Credit
Rating
Agencies
TELA
Bond
Investors1
Continuing Disclosure posted to EMMA (MSRB
public disclosure website) and credit
surveillance / monitoring required
1 TELA bond investors includes bank that owns GPTC private placements. TxDOT also required to provide continuing disclosure to TELA bond investors as it relates to the
State Highway Fund.
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Transportation Infrastructure Finance and Innovation Act (TIFIA)
13
TIFIA Review and Approval Process
Phases Description Duration
Initial LOI
Eligibility Review
Intended to identify major statutory, regulatory,
financing or timing issues that would prevent the
project from receiving TIFIA assistance.
30 days
Creditworthiness
Review
Involves evaluation of the plan of finance,
financial model, and feasibility of the pledged
revenue.
45 to 90 days
Application
Review
Includes review of project documents, notification
of whether the application is complete or whether
additional materials are needed, and approval or
disapproval of the application.
Approval
provided within
90 days
• Established in 1998
• Federal credit program administered by USDOT with oversight from Build America Bureau
• Provides credit assistance for surface transportation projects
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2016 2017Q1 Q2 Q3 Q4Q12017
Q2 Q3
Investment Grade T&R Study Finalized1/1/2016
Receive Indicative Credit Rating3/1/2016
TxDOT Submits Letter of Intent3/15/2016
Begin Creditworthiness Review & Sponsor Presentation5/29/2016
Invitation to Apply9/25/2016
TxDOT Submits Loan Application
9/26/2016
Application Approved by Credit Council
12/25/2016
Receive Provisional Credit Ratings4/3/2017
Loan Closing Preparation4/24/2017
Bond Review Board Approval5/16/2017
Loan Closes
6/8/2017
Loan Proceeds Received7/3/2017
3/15/2016 - 4/13/2016LOI Eligibility Review
4/14/2016 - 5/28/2016TIFIA Procures Legal & Financial Advisors
5/29/2016 - 9/25/2016Creditworthiness Review
9/26/2016 - 12/24/2016Application Review & Credit Council Review
12/25/2016 - 4/23/2017Loan & Trust Agreement Negotiation & Drafting
Illustrative TIFIA Time Line
4/24/2017 - 6/7/2017Loan Closing Coordination
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Texas TIFIA Loans
Project Location YearAmount
(millions)P3
US 183S Bergstrom Expressway (CTRMA) Austin 2016 $282 No
SH 288 Managed Lanes Houston 2016 357 Yes
North Tarrant Express Segs 3A&3B DFW 2014 533 Yes
Grand Parkway Segs D&G Harris & Montgomery Counties 2014 841 No
DART Orange Line Extension DFW 2013 120 No
Pres George Bush Turnpike Western Ext (NTTA) DFW 2011 418 No
North Tarrant Express Segs 1&2W DFW 2009 650 Yes
IH 635 LBJ Expressway DFW 2008 850 Yes
SH 130 Segs 5&6 Austin/San Antonio 2007 430 Yes
*US 183A Turnpike (CTRMA) Austin 2005 66 No
*Central Texas Turnpike System Austin 2002 900 No
TOTAL IN TEXAS 11 $5,447
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*Loans retired
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62 TIFIA Loans Issued To Date Totaling More Than $82 Billion
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Conclusion
Questions?
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Contact Information
Contact Information:
Jennifer Wright
Project Finance, Debt & Strategic Contracts Division
TxDOT Main Office
125 E. 11th Street
Austin, TX 78701
(512) 463-8946
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