The San Joaquin Hills Transportation Corridor Agency (SJHTCA) has executed a refunding of its Series 2014A bonds, resulting in a reduction in debt service payments of $138.7 million, net of all transaction costs.
The move will not extend bond maturity dates and further strengthens the Agency’s cash position while creating additional flexibility to pay down other bonds early or invest in key capital projects.
"This transaction is another example of the SJHTCA’s commitment to fiscal stewardship in reducing debt service," said SJHTCA Chair and Mission Viejo Mayor Trish Kelley. "We take our duties of fiscal responsibility very seriously and are pleased to be able to realize such a large savings without extending maturity dates."
The refunding, authorized by the SJHTCA Board of Directors on Nov. 18, took advantage of current low interest rates, which provided an opportunity for the refunding of $1.05 billion of its Series 2014A bonds that are callable at par in 2025.
The Transportation Corridor Agencies (TCA) have previously taken advantage of favorable market conditions — such as low interest rates — to improve the financial positions of its two Agencies and save more than $600 million in debt service payments without extending any bond maturity dates.
"We are committed to working with our elected leadership and continually seeking opportunities to bolster our creditworthiness and capitalize on low interest rates, reduce debt payments and generate cash flow," said TCA CFO Amy Potter. "We are proud of the results of our tender and exchange offer and the successful sale of refunding bonds, which shows investor confidence in our credit."
TCA’s other Agency, the Foothill/Eastern Transportation Corridor Agency (F/ETCA), completed an innovative refunding transaction in January, reducing its bond payments by $214 million, without extending any maturity dates.
Executed in January, the refunding of certain outstanding 2013A and all 2013C bonds decreased annual debt payments, resulting in a reduction in debt service payments of $214 million net of all transaction costs.
This month, that bond refunding transaction was named Deal of the Year for the Far West Region by The Bond Buyer, an independent municipal finance publication.
The SJHTCA and F/ETCA are two joint powers authorities created to plan, finance, construct and operate Orange County’s 51-mile toll road network — the 73, 133, 241 and 261 Toll Roads.
The Toll Roads have been providing a choice for drivers for more than 20 years and the tolls collected are used to repay the debt incurred to construct the system and fund on-going operations and improvements.
The Toll Roads system, which represents 20% of Orange County’s highways, is the largest toll road network in California.
The Transportation Corridor Agencies (TCA) are two joint powers authorities formed by the California Legislature in 1986 to plan, finance, construct and operate Orange County’s public toll road system comprised of the 73, 133, 241 and 261 Toll Roads.
