March 3, 2009
For a PDF of the full press release
The I-595 Corridor Roadway Improvement Project in Florida, for which Taylor-DeJongh (TDJ) served as financial advisor to the USDOT / TIFIA Joint Program Office, closed on March 3, 2009. TIFIA will provide the project sponsor, ACS Infrastructure Development, with a US$603 million loan. The rest of the financing will be provided by a consortium of twelve banks. Total project costs, including financing costs, amount to US$1.68 billion for the reconstruction, widening and addition of express lanes to a 10.5 mile interstate highway in Broward County, Florida.
Taylor-DeJongh supported TIFIA from the application stage through to financial close. The Florida Department of Transportation (FDOT) submitted a TIFIA application under the innovative SEP-15 process, which enables the shortlisted bidders to approach TIFIA for funding commitments. TDJ analyzed the proposed financing plans, performed due diligence of the entire proposed project structure and assisted TIFIA in drafting preliminary term sheets. After the selection of the concessionaire, Taylor-DeJongh performed detailed financial analysis and assisted TIFIA in its negotiations with the borrower. In addition, Taylor-DeJongh advised TIFIA on credit issues in the context of the current financial markets.
I-595 is a landmark transaction due to its use of availability payments. Under this structure, FDOT will retain both the toll revenues and the traffic risk and will compensate the concessionaire based on a flat amount. FDOT also agreed to share some of the interest rate risk prior to financial close.
TIFIA’s involvement in the transaction was crucial in order to provide competitively priced long-term debt to the project and also to complement commercial bank and equity funding. TIFIA’s debt is pegged to the US government borrowing rate for local entities and does not have a credit margin.
Taylor-DeJongh CEO, Mr. Terry Newendorp, said: “Taylor-DeJongh was very pleased to act as Financial Advisor to TIFIA on this very complex transaction, which closed in such challenging times. We look forward to continuing our work with TIFIA and to our involvement in other aspects of the US market for infrastructure PPPs.”
The closing of the deal was covered in numerous industry publications, including IJ, Project Finance (published by Euromoney Institutional Investor) and Project Finance International.