Slide 1 Transportation Infrastructure Finance and Innovation Act (TIFIA) Reno Rail Corridor Port of Miami Tunnel SH 130 Jorianne Jernberg, Financial Analyst Office of Innovative Program Delivery Federal Highway Administration September 21, 2011
TIFIA Overview 2 Overview Funding and Repayment Portfolio TIFIA & P3s Washington Metro Capital Improvement Program Competitive Solicitations Future Opportunities Cooper River Bridge
Program Objectives 3 Program Objectives: Leverage limited Federal resources and stimulate Capital Market investment Facilitate projects with significant public benefits Encourage new revenue streams and private participation Fill capital market gaps for secondary/subordinate capital Be a flexible, patient investor willing to take on investor concerns about investment horizon, liquidity, predictability and risk Limit Federal exposure by relying on market discipline 3
Types Credit Assistance 4 Secured (Direct) Loan Maximum term of 35 years from substantial completion Repayments must start 5 years after substantial completion Loan Guarantee Guarantees a project sponsor s repayments to non- Federal lender Loan repayments to lender must commence no later than 5 years after substantial completion of project Line of Credit Contingent loan available for draws as needed up to 10 years after substantial completion of project
Eligible Sponsors & Projects 5 ELIGIBLE SPONSORS State Governments Private Firms Special Authorities Local Governments Transportation Improvement Districts ELIGIBLE PROJECTS Highways and Bridges Intelligent Transportation Systems Intermodal Connectors Transit Vehicles and Facilities Intercity Buses and Facilities Freight Transfer Facilities Passenger Rail Vehicles and Facilities 5
Eligible Project Costs Development phase activities including planning, revenue forecasting, environmental review, permitting, preliminary engineering and design work Construction, reconstruction, rehabilitation, replacement, acquisition of real property, environmental mitigation, and construction contingencies Capitalized interest Up-front payments from winning bidder to State or local authority Costs incurred prior to application, such as right-ofway acquisition, are determined eligible on a caseby-case basis 6
TIFIA Requirements 7 Minimum anticipated project costs > $50M 33% of reasonably anticipated eligible project costs Senior debt must receive an investment grade rating from a nationally recognized credit rating agency The project must be included in the relevant State s transportation planning and programming cycle The project must have a dedicated revenue source, such as tolls or other user fees, that are pledged to secure debt service payments for both the TIFIA and senior debt financing
Benefits of TIFIA 8 Long term, fixed cost, permanent, up-front financing Borrower may be minimum investment grade Non recourse financing project cash flow supported Funds drawn as needed Senior or Subordinate Lien Flexible amortization No pre-payment penalty Low interest rates
How TIFIA is Funded 9 SAFETEA-LU Annual Authorizations: 2005 2009 Maximum Budgetary Authority: $122 Million $3.0 $2.5 $2.0 Credit Amount Budget Authority $ 1.8 $ 1.6 $ 2.2 $ 2.4 $ 2.6 $ 2.6 Maximum Budget Authority $1.5 $1.0 $0.5 $0.0 1999 2000 2001 2002 2003 2004 SAFETEA-LU (per year)
TIFIA Funding and Leverage 10 SAFETEA-LU provides $122 million per year to cover the subsidy cost of providing credit assistance TIFIA sets aside a portion of these monies for each project based on its level of risk The remainder of the loan amount is borrowed from Treasury As a rule of thumb, $1 in budget authority can be leveraged to provide $10 in credit assistance
TIFIA Repayment: Revenue Pledges 11 User-backed Financings Miami Intermodal Center RCF South Bay Expressway Central Texas Turnpike Warwick Intermodal Station Pocahontas Parkway I 495 Capital Beltway/Hot Lanes SH-130 (Segments 5-6) Intercounty Connector Triangle Expressway North Tarrant Express Tax-backed Financings Miami Intermodal Center GP Washington Metro CIP Tren Urbano Cooper River Bridge Transbay Transit Center Denver Union Station Other Staten Island Ferries and Terminals Port of Miami Tunnel Pledged Revenues Rental car customer facility charges Facility tolls Facility tolls Rental car customer facility charges Facility tolls Facility Tolls Facility Tolls Facility Tolls Facility Tolls Facility Tolls Pledged Taxes State fuels excise taxes Local government contributions Various commonwealth taxes State and county contributions Tax increment financing Local sales taxes and tax increment financing Pledged Payments Tobacco settlement payments Availability Payments I-595 Corridor Roadway Improvements Availability Payments
Program History Slide 12 33 States have projects that submitted TIFIA LOIs
Interest in TIFIA Since 1999 13 156: letters of interest submitted from 33 States, including Puerto Rico and Washington, D.C. 160: approximate amount in billions of infrastructure investment from projects that submitted TIFIA LOIs 45.5: billions of dollars of credit assistance requested from projects that submitted TIFIA LOIs
14 TIFIA Credit Agreements Since 1999 12: states plus DC & Puerto Rico have projects with TIFIA 25:TIFIA direct loans 1: TIFIA loan guarantee 0: TIFIA lines of credit 31: billions of dollars invested in TIFIA projects 8.4: billions of dollars of TIFIA credit assistance
States with Executed Credit Agreements (TIFIA Instruments in $ millions as of 09/2011) 15
TIFIA Portfolio Statistics 16 TIFIA Portfolio by Mode TIFIA Portfolio and P3 Financings 5 3 8 16 16 Highway Projects Intermodal Projects Transit Projects P3 Projects Public Projects
Where It s Happening: Florida Slide 17 BROWARD COUNTY I-595 PORT OF MIAMI TUNNEL Availability Payments TIFIA Congestion Pricing Availability Payments TIFIA
Where s it Happening: Texas Slide 18 NORTH TARRANT EXPRESSWAY DALLAS IH-635 Congestion Pricing First Direct Pension Fund TIFIA PAB s
Where s it Happening: Virginia Slide 19 CAPITAL BELTWAY HOT LANES POCAHONTAS PARKWAY Congestion Pricing TIFIA PAB s
TIFIA Loan Performance 20 6: TIFIA loans have been retired early 11: Projects are actively disbursing 3: Projects are in repayment 0: Payment defaults on TIFIA loans 1: Project has emerged from bankruptcy
History of TIFIA Solicitations 21 1999-2000: Fixed-date application process 2001-2009: Rolling (1st come, 1st served) process 2010-2011: Return to fixed-date process TIFIA program over subscribed beginning in FY 2008 Funding was reserved for projects in the TIFIA pipeline Application window was closed for all other projects until December 2009
TIFIA Competitive Solicitations 22 NOFA solicited Letters of Interest (LOI) from project sponsors interested in applying for TIFIA credit assistance 2010: DOT received 39 LOIs seeking $12.5 billion in credit assistance to finance $40 billion in investment 2011: DOT received 34 LOIs seeking $14 billion in credit assistance to finance $48 billion in investment TIFIA oversubscribed by a ratio of more than 10:1 in both years of competitive solicitation
23 How to Effectively Apply for TIFIA Address eight statutory criteria Describe the transportation problem being solved Differentiate the project Projects evaluated against criteria and against other projects in the cohort Emphasize project strengths Projects don t have to score well in each category in order to be selected Resubmit LOIs Projects unsuccessful for one round are able to reapply in subsequent rounds
Potential TIFIA Changes 24 President s 2012 Budget proposes $450 million in Budget Authority for TIFIA Various bills have been proposed in Congress that would increase the annual TIFIA appropriation anywhere from $285 million - $375 million Proposals to increase the funding percentage from 33% to 49% of eligible project costs Senator Boxer and Chairman Mica have both indicted support for increasing TIFIA s authorized funding level
Future Funding Opportunities 25 TIGER III On July 1st, DOT issued an interim Notice of Funding Availability (NOFA) for the TIGER III grant program Up to $150 million of the $526.944 million available for TIGER Discretionary Grants may be used for TIFIA Pre-applications due October 3, 2011 Final applications due October 31, 2011 http://www.dot.gov/tiger/application-resources.html TIFIA Competitive Solicitation III The TIFIA JPO expects to issue a Notice of Funding Availability at the end of calendar year 2011 http://www.fhwa.dot.gov/ipd/tifia/
Contact Information 26 Jorianne Jernberg Financial Analyst, TIFIA JPO Phone: (202) 366-0459 E-mail: Jorianne.Jernberg@dot.gov Website: http://www.fhwa.dot.gov/ipd/