U.S. DOT Secretary Marks Repayment of $573 Million Loan

[Ca Acta via BizWire]

LOS ANGELES COUNTY, Calif.--(BUSINESS WIRE)--April 29, 2004--U.S.
Transportation Secretary Norman Y. Mineta visited the Henry Ford
Bridge on the Alameda Corridor Thursday morning to mark the repayment
of a $573 million Department of Transportation (DOT) loan used in
construction of the 20-mile corridor.
Secretary Mineta joined representatives from the Alameda Corridor
Transportation Authority (ACTA), as well as elected state and local
officials, in signing a proclamation acknowledging the repayment of
the $400 million loan made in 1997 and accrued interest. The loan,
which is being paid 28 years in advance of its 2032 maturity date, was
a key component in construction of the $2.4 billion Alameda Corridor
rail expressway between the Ports of Long Beach and Los Angeles and
the downtown L.A. rail yards.
ACTA held a public bond sale April 21. The joint-powers authority
will formally pay off the DOT loan with a wire transfer scheduled for
May 6. The bonds will save the joint-powers authority $65.8 million in
present value. The terms were approved by ACTA's Governing Board and
the Los Angeles and Long Beach City Councils and Harbor Commissions.
ACTA sold the bonds at a 5.99 percent interest rate. Goldman Sachs
and Public Financial Management handled the transaction. The insured
bond issue has received an AAA rating and a stable outlook from
Standard & Poor's, Fitch Ratings and Moody's. Ambac, which insures
ACTA's bonds, has a financial strength rating of AAA.
"We really want to thank the Department of Transportation for
believing in this project. DOT was one of our first partners in
building the corridor," said Los Angeles Councilwoman Janice Hahn,
co-chair of the ACTA Board. "By paying off this loan early, we will be
saving millions of dollars, which will allow us to work on new
projects that will relieve congestion throughout Los Angeles."
The rate on ACTA's 1999 Department of Transportation was 6.79
percent. Payoff of the loan and funding costs of issuance,
underwriting, insurance and debt reserve account amounted to a par
issuance of $686 million.
ACTA can sell the new bonds for two primary reasons: two years of
operational performance that confirms revenue forecasts and a recent
IRS ruling that confirms the tax-exempt eligibility of a portion of
the project bonds.
"Interest rates remain near historically low levels, and ACTA
wanted to refinance its debt and achieve the same types of savings
homeowners have been tapping into for the last couple of years," said
ACTA Chair Frank Colonna, Vice Mayor of Long Beach.