Andrew Right Executive Director ARTBA P3 Conference 2016 1

Duane Callender, Director TIFIA Credit Program ARTBA P3 Conference 2016 2

Types of Credit Assistance Secured (Direct) Loan Maximum term of 35 years from substantial completion Repayments must start 5 years after substantial completion Loan Guarantee Guarantees a project sponsor’s repayments to non- Federal lender Loan repayments to lender must commence no later than 5 years after substantial completion of project Line of Credit Contingent loan available for draws as needed up to 10 years after substantial completion of project

TIFIA Program Objectives Leverage limited Federal resources and stimulate Capital Market investment Facilitate projects with significant public benefits Encourage new revenue streams and private participation Fill capital market gaps for secondary/subordinate capital Be a flexible, “patient” investor willing to take on investor concerns about investment horizon, liquidity, predictability and risk Limit Federal exposure by relying on market discipline

Benefits of TIFIA Long term, fixed cost, permanent, up-front financing Borrower must be minimum investment grade Non recourse financing—project cash flow supported Funds drawn as needed Senior or Subordinate Lien Flexible amortization No pre-payment penalty Low interest rates Low Interest Rate - 2.30% on 6/30/16

TIFIA Changes Under the FAST Act Expanded Eligibilities Transit-Oriented Development Projects Rural Projects Fund within a State Infrastructure Bank Modified Rural Project Eligibility Streamlined Application Process Fee Relief for Small Projects (under $75 million) Master Credit Agreement Authority Clarifications

Eligible Sponsors and Projects ELIGIBLE PROJECTS State Governments State Infrastructure Banks Private Firms Special Authorities Local Governments Transportation Improvement Districts Highways and Bridges Intelligent Transportation Systems Intermodal Connectors Transit Vehicles and Facilities Intercity Buses and Facilities Freight Transfer Facilities Passenger Rail Vehicles and Facilities Rural Infrastructure Projects Transit-Oriented Development

TIFIA Requirements Minimum anticipated project costs > $50M 33% of reasonably anticipated eligible project costs unless the sponsor provides a compelling justification for up to 49% Senior debt must receive 2 investment grade ratings (BBB-/Baa3) from nationally recognized credit rating agencies The project must be included in the relevant State’s transportation planning and programming cycle The project must have a dedicated revenue source, such as tolls or other user fees, that are pledged to secure debt service payments for both the TIFIA and senior debt financing

States with Executed Credit Agreements (TIFIA Instruments in $ millions as of June 2016)

Revenue Pledges

Recent TIFIA P3 Projects TIFIA has closed five loans for P3 projects within the last 18 months: Project Location TIFIA Loan Closed TIFIA Loan Amount Pledge Purple Line Light Rail Maryland (DC area) June 2016 $874.6 Million Availability Payments SH 288 Toll Lanes Houston area April 2016 $357 Million Facility Tolls I-77 HOT Lanes Charlotte area May 2015 $189 Million East End Crossing Louisville area (Ohio River Bridge) April 2015 $162 Million State Appropriations Portsmouth Bypass South Central Ohio March 2015 $209.3 Million

TIFIA LOI Review and P3 Projects Public sponsor may submit a LOI on behalf of concessionaire and ultimate borrower TIFIA will: Work with public sponsor upfront on indicative terms that can be provided to P3 bidders Engage earlier in the project development cycle Concessionaire’s plan of finance and application must still be evaluated before loan agreement can be negotiated

Requirements of Creditworthiness Financial Plan Financial Model Revenue Pledged to TIFIA Indicative Rating $250,000 down payment towards costs

Patrick DeCorla-Souza, FHWA P3 Research and Resources ARTBA P3 Conference 2016 14

FHWA Technical Resources: P3 Toolkit Fact sheets: One page summaries of various P3 concepts Primers – Introduction to P3 concepts Guidance documents – More detailed technical guides for practitioners: Model P3 contracts Successful P3 practices Value for money, benefit-cost analysis, risk analysis Analytical tools – P3-SCREEN and P3-VALUE

P3-VALUE Value for Money analysis Benefit-Cost analysis Risk Analysis Financial Viability analysis

Research P3 Efficiencies – Development of methods to estimate potential cost, schedule, risk and quality impacts of P3 project delivery Interim report completed. White papers and roundtables on P3 issues: Completed: Revenue risk sharing Use of design-build performance requirements Early involvement of private developers in consideration of P3s Planned: Consideration of tax issues in developing and evaluating P3s Information source for major projects delivered conventionally and through P3s

Training . Webinars -- on P3 evaluation Recordings available on FHWA’s website. Training courses – P3 evaluation using P3-VALUE Available to public sector transportation agencies at no cost Peer Exchanges -- Reports available on FHWA’s website .

Website FHWA Office of Innovative Program Delivery (IPD) P3 Website: http://www.fhwa.dot.gov/ipd/p3/

SIBs Presentation for FM/FSp Workshop Contact Information Patrick DeCorla-Souza P3 Program Manager Office of Innovative Program Delivery Federal Highway Administration (202) 366-4076 Patrick.DeCorla-Souza@dot.gov Instructor Notes