Orange County’s Toll Roads Reduce Debt Payments by More Than $300 Million

Strong market demand reflective of F/ETCA’s successful performance and management

IRVINE, Calif. - December 19, 2019

Today, the Foothill/Eastern Transportation Corridor Agency (F/ETCA) announced it has reduced its debt service payments by more than $300 million, with a present value savings of more than 16 percent over the life of the bonds, by successfully pricing its 2019A senior lien refunding bonds. 

In November, the F/ETCA Board of Directors approved to advance refund $820 million of its Series 2013A bonds that are callable at par in 2024. The refunding transaction achieves the F/ETCA Boards’ goals to:
•    Decrease annual debt payments every year without extending any maturity dates.
•    Improve debt service coverage every year. 
•    Include a 10-year par call option on refunding bonds to preserve future flexibility.

“The F/ETCA’s strong financial track record and recent ratings upgrade made a big difference in this bond refunding. The hard work of the Board and staff in aggressively managing TCA’s finances are being recognized by Wall Street and investors,” said Christina Shea, F/ETCA Chairwoman, and Mayor of Irvine. “All our bonds are rated investment grade by all three major ratings agencies and Fitch’s recent upgrade and positive outlook from S&P further reinforces our commitment to ensuring Orange County’s Toll Roads are financially sustainable into the future.” 

In 2013, F/ETCA’s bonds were successfully restructured, focusing primarily on revenue projections and providing sufficient margins to weather economic downturns. The revenue projections include a small annual two percent inflationary toll rate increase designed to keep the traffic on The Toll Roads and off the highly congested freeways and city streets. 

F/ETCA issued $2.27 billion of tax-exempt Toll Revenue Refunding Bonds (“Series 2013 Bonds”), of which the senior lien has subsequently been upgraded several notches to A- by S&P. With interest rates at historic lows, this created an opportunity to advance refund some of the Series 2013 Bonds using taxable bonds for significant savings. 

The Transportation Corridor Agencies are responsible for planning, designing, financing, constructing and operating Orange County’s 51-miles of toll roads – the largest toll road network in California. State Routes 73, 133, 241 and 261 represent 20 percent of Orange County’s major highway system and record more than 330,000 daily transactions.

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