Early paydown of bond debt to save Agency approximately $54 million
Irvine, Calif. - January 25, 2024
As part of the Transportation Corridor Agencies’ (TCA) Strategic Plan, the Foothill/Eastern Transportation Corridor Agency (F/ETCA) has executed an early paydown of $60 million in senior lien bond debt.
The early paydown of bond principal – bonds that were issued in 2013 and had a maturity date of 2042 – saves the Agency approximately $54 million in interest payments. The F/ETCA paid off the bonds with cash reserves when the bonds were callable after January 15, 2024.
“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 aimed at overall debt reduction,” said F/ETCA Board Chair and San Juan Capistrano City Council Member John Taylor.
The Agencies plan by 2030 to pay down another $920 million of bonds early, saving an additional $806 million in interest. This future debt reduction, when combined with the current reductions of $1.389 billion, will collectively reduce debt by $3.1 billion.
“Strong fiscal management is core to the Agencies’ past and future success,” shared Ryan Chamberlain, TCA Chief Executive Officer. “Protecting the ability to fund operations and capital improvement projects, while positioning the Agencies to take advantage of debt reduction and early paydown opportunities, aligns with the fiscal management objectives outlined in the Boards’ Strategic Plan.”
The San Joaquin Hills Transportation Corridor Agency (SJHTCA) and F/ETCA are two joint powers authorities created to plan, finance, construct and operate the 420 lane miles that comprise the 73, 133, 241 and 261 Toll Roads.
The Toll Roads have been providing a choice for drivers for more than 30 years and the tolls collected are used to repay the debt incurred to construct the system and fund on-going operations and improvements.
The Toll Roads system, which represents 20% of Orange County’s highways, is the largest toll road network in California.
This is great news for users of the Toll Roads and shows a substantial amount of financial savvy on the part of management.