April 26, 2007 Atlanta, Georgia The Focus Georgia Conference: Transportation Funding Solutions for the Future Working with Public-Private Partnerships Mark Sullivan, Director TIFIA Credit Program

Page 2 TIFIA and Private Sector Borrowers In 2003, $140 million subordinate loan to Macquarie for South Bay Expressway, in conjunction with senior loans from banking consortium and equity from private developer. In 2006, received application to refinance a portion of Transurban’s acquisition debt for the Pocahontas Parkway in order to construct the Richmond Airport Connector. In 2006, agreed to provide conditional assistance to competing concessionaires for Texas CDA Projects including SH-121. TIFIA authority to deal directly with private borrowers always part of program design:

Page 3 Total TIFIA Assistance: $3.2 Billion Total Project Investment: $13.2 Billion Reno Rail Corridor $51 Paid in full SR 125 Toll Road $140 Staten Island Ferries $159 Paid in full Tren Urbano $300 Paid in full Washington Metro CIP $600 Miami Intermodal Center $439 Central Texas Turnpike $917 Cooper River Bridge $215 Refinanced Warwick Intermodal $ A $66 LA-1 $66 TIFIA-assisted Projects (Credit Assistance in Millions) Rental Car Facility 170 FDOT Program 269 Paid in full

Page 4 TIFIA’s Flexible Credit Terms 35-plus-year, fixed-rate debt for up to 33 percent of project costs ‘AAA’ taxable interest rate for sub-investment grade debt Rate is ‘locked’ upon execution of credit agreement Loan proceeds drawn only when needed Debt service can be ‘sculpted’ to meet expected cash flow No pre-payment penalty TIFIA lien is effectively subordinated TIFIA provides loan structuring advantages to borrowers:

Page 5 TIFIA Loans – Notable Features Innovations utilized by TIFIA borrowers include: Short-term (lower-cost) construction financing taken out with TIFIA loan, with no interest rate risk. Alternate debt service schedules, lessening possibility of payment default in event of underperformance. No fixed principal amortization schedule. Principal retired from annual surplus funds, using Project Life Cover Ratio as confirmation of ultimate recovery and trigger for contingent revenue increases.

Page 6 TIFIA and Co-Investors TIFIA loan structure is cognizant of debt and equity investors: Federal Government is a ‘patient investor’ – when project economics require it. Negative amortization of TIFIA loan is allowed – but not when senior lenders are reducing their investment. Equity in a project financing should be a very patient investor. An extremely profitable project should expect to retire its TIFIA loan early.

Page 7 Public/Private Concession Procurements When public entity seeks binding financial proposals from competing private ventures, each of which intends to seek TIFIA, should DOT… Offer uniform terms and conditions, upfront, to every concessionaire? Work with each competitor, simultaneously and confidentially, to structure concessionaire-specific debt alternatives? The TIFIA experiment (“SEP-15”) with Texas CDA Projects provides the former, within the context of TxDOT solicitations. Current TIFIA process assumes applicant already controls the project.

Page 8 TIFIA Joint Program Office (HCF-50) U.S. Department of Transportation Room Seventh Street, SW Washington, DC fax: (202) Mark Sullivan, Director(202) Duane Callender(202) Cheryl Jones(202) Suzanne Sale(602) TIFIA Contact Information