While the delay is substantial, it is mitigated by the TIFIA payment structure as debt service payments do not begin until five years after the project is operational, giving the project substantial flexibility. The project also benefits from relatively low leverage, strong legal covenants with no additional senior debt allowed except for project completion, and a government sponsor with extensive transportation capital planning and managed lanes experience.The rating also considers the delay of 295 days to the original Substantial Completion Date as of January 2021, in addition to the risks associated with design-build joint venture (DBJV) contractors of weaker credit quality and with relatively little experience working together in California. The forecasted demand is based on heavy congestion in the 72 -mile Interstate 405 (I-405) corridor, with reasonable traffic capture and revenue growth rate assumptions that support the rating. The asset fundamentals support the forecasted demand for the managed lanes over the medium-term and through loan maturity. The outlook is stable.RATINGS RATIONALEThe Baa2 rating reflects the fundamental strengths of this managed lane/express lane project, including its purpose as a congestion reliever in a densely populated, highly congested, primarily commuter corridor in a service area that is socioeconomically strong and growing.
The commercial terms are expected to remain unchanged. OCTA's 2017 loan is expected to be cancelled with a new loan executed in April 2021 in order to reset the 2.91% interest rate closer to current market yields, resulting in lower debt service. For the most up to date information, please see the OCTA website.Rating Action: Moody's assigns a Baa2 to the TIFIA Loan for Orange County Transportation Authority's (CA) 405 Express Lanes after loan rate reset outlook stableGlobal Credit Research - New York, Ap- Moody's Investors Service has assigned a Baa2 to Orange County Transportation Authority's (CA) (OCTA's) $628.93 million 2021 TIFIA (Transportation Infrastructure and Innovation Finance Act) Loan (405 Express Lanes) (EL's).
#OCTA FREEWAY EXPRESS DRIVER#
That commute can be reduced to 13 minutes if a driver chooses to take the 405 Express Lanes. In 2040, it's expected to take 29 minutes to travel during rush hour from SR-73 to I-605 in the general purpose lanes after improvements to the I-405 are complete. The toll policy has not been finalized yet but it will be designed to provide customers with a safe, reliable, congestion-free commute.
#OCTA FREEWAY EXPRESS DRIVERS#
Solo drivers in the 405 Express Lanes will pay the full toll and carpools are anticipated to be offered discounts or free travel. Because the amount of traffic in the 405 Express lanes will be optimized by raising and lowering tolls in response to traffic demand, the 405 Express Lanes will be more predictable and move more vehicles per lane during peak periods than the regular, general purpose lanes. The 405 Express Lanes, however, will provide a fast, stress-free travel option. The general purpose lane portion of the project is an OCGO, formally Measure M (Orange County's half-cent transportation sales tax), project and will be funded by a combination of local, state and federal funds, with the express lanes portion of the project financed and primarily paid for by those who choose to pay a toll and use the 405 Express Lanes.īecause of the high demand for the I-405 and the need to stay within the existing right of way, the project cannot provide enough additional lanes to eliminate congestion. When the express lanes open, two-person carpools will pay a toll only during peak hours and carpools of three or more will be free at all times. The 405 Express Lanes will give solo drivers the choice to speed up their commute for a toll and give options for carpoolers to use the lanes for free. In addition, the project will add the 405 Express Lanes, incorporating the existing carpool lanes and a new lane in each direction between SR-73 and I-605. The project includes adding one regular lane in each direction between Euclid Street and I-605 and making improvements to freeway entrances, exits and bridges. OCTA, in cooperation with The California Department of Transportation (Caltrans), is widening the San Diego Freeway (I-405) between State Route 73 (SR-73) and Interstate 605 (I-605).The project will improve 16 miles of I-405 between the SR-73 freeway in Costa Mesa and I-605 near the L.A.
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