Transportation Corridor Agencies’ Sound Fiscal Practices Reduce Debt by $1.275 Billion
Plans for further debt reduction are expected to collectively reduce debt by $3.1 billion by 2030
Irvine, Calif. - June 06, 2023
The Transportation Corridor Agencies (TCA) have substantially reduced their bond debt and saved the Agencies more than a billion dollars in interest since 2019 because of debt management strategies, further enhancing TCA’s strong financial position.
Recent bond refundings, early paydowns of bonds and an open market bond buyback program have reduced debt by $1.275 billion. The reduction of debt has been achieved through:
- Recent bond refundings replaced higher interest rate bonds with lower interest rate bonds, saving $700 million, without extending bond maturity dates
- In July 2022, TCA executed an early paydown of $125 million of bond principal, saving $180 million in interest
- An early paydown of $150.8 million in bond principal through open market bond buybacks saved the Agencies $150 million in interest
The Agencies plan by 2030 to pay down another $980 million of bonds early, saving an additional $860 million in interest. This future debt reduction, when combined with the current reductions of $1.275 billion, will collectively reduce debt by $3.1 billion.
“This early paydown of bond debt is another example of the commitment both Agencies have to fiscal stewardship, as well as fulfilling the plan of action laid out in our Strategic Plan,” said San Joaquin Hills Transportation Corridor Agency (SJHTCA) Chair and Newport Beach Mayor Pro Tem Will O’Neill.
“Strong fiscal management has been part of the blueprint of the Agencies’ past and future success,” said Foothill/Eastern Transportation Corridor Agency (F/ETCA) Chair and San Juan Capistrano Council member John Taylor. “The Boards’ past decisions created the strong footing that the current Boards are building upon to continue the path of fiscal responsibility.”
The SJHTCA and the F/ETCA, which comprise TCA, 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.
Both Agencies are on firm financial footing with strong reserves and solid traffic and revenue forecasts that have been consistently recognized by Wall Street’s independent rating agencies, as well as investors.
“We are committed to working with our Boards and continuously seeking bond market opportunities to reduce debt payments and generate cash flow without extending bond maturity dates,” said TCA Chief Financial Officer Amy Potter. “We are extremely pleased with the success of our debt management strategies.”
The Toll Roads system, which represents 20 percent 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.