ORANGE, Calif., Sept. 10, 2021 /PRNewswire/ — The Orange County Transportation Authority on Thursday reset the interest rate to 1.95% on its $629 million federal loan for the I-405 Improvement Project, a first-of-its-kind reset that will help save an additional $158 million over the life of the loan.
OCTA finalized its initial loan in 2017 with a 2.91% interest rate through the Transportation Infrastructure Finance and Innovation Act.
Last year, OCTA began working with the U.S. Department of Transportation’s Build America Bureau, the agency that runs the TIFIA program, to take advantage of historically low interest rates to realize savings of $158 million on a net present value basis. OCTA is the first agency in the country to reset a partially drawn TIFIA loan.
“I’m proud of OCTA for being proactive in taking advantage of low interest rates to help save millions of dollars for our taxpayers,” said OCTA Chairman Andrew Do, also the county’s First District Supervisor. “Thank you to our partners at the U.S. Department of Transportation for working with us to create a model on how to refinance a drawn TIFIA loan, setting an example for other transportation agencies throughout the country.”
The TIFIA loan will be repaid solely using revenue collected from drivers who choose to use the 405 Express Lanes being built as part of the I-405 Improvement Project. Toll revenue collected beyond what it costs to repay the loan will fund transportation improvements in the 405 corridor.
“Innovative financing is critical to delivering major infrastructure projects and it’s great to see OCTA lead in this area to maximize available funding and continue making improvements for everyone who lives, works and drives near the 405 Freeway,” said Michael Hennessey, Chairman of OCTA’s Finance and Administration Committee.
OCTA is working to issue Bond Anticipation Notes, taking advantage of lower short-term interest rates over the next three years instead of drawing on its TIFIA loan, potentially saving $20 million more.
“Every dollar we save Orange County taxpayers in interest, is one more dollar we can invest in our infrastructure to enhance our transportation system,” said OCTA CEO Darrell E. Johnson.
The I-405 Improvement Project will add one regular lane in each direction along a 16-mile stretch of I-405, and a second lane in each direction that will combine with the existing carpool lanes to form the 405 Express Lanes.
About OCTA: The Orange County Transportation Authority is the county transportation planning commission, responsible for funding and implementing transit and capital projects for a balanced and sustainable transportation system that reflects the diverse travel needs of the county’s 34 cities and 3.2 million residents. With the mission of keeping Orange County moving, this includes freeways and express lanes, bus and rail transit, rideshare, commuter rail, environmental programs and active transportation.
FOR MORE INFORMATION:
Eric Carpenter (714) 560-5697
Megan Abba (714) 560-5671
SOURCE Orange County Transportation Authority