Metro - File #: 2016-0504

• File #: 2016-0504
• Type: Resolution
• Status: Consent Calendar
• File created: 6/15/2016
• In control: Board of Directors - Regular Board Meeting
• On agenda: 8/25/2016
• Final action: 8/25/2016
• Title: ADOPT a resolution, Attachment A, authorizing the Chief Executive Officer and other Authorized Officers to negotiate and execute the loan agreement and related documents between LACMTA and the U.S. Department of Transportation related to a $307.0 million Transportation Infrastructure Finance and Innovation Act loan for the Westside Purple Line Extension Project Section 2. (REQUIRES SEPARATE, SIMPLE MAJORITY BOARD VOTE.)
• Sponsors: Finance, Budget and Audit Committee
• Indexes: Budgeting, Debt, Federal Transit Administration, Full Funding Grant Agreement, Locking, Measure R, Measure R Tifia Loan- Westside Purple Line Extension (Project), Metro Purple Line, Metro Rail D Line, Project, Resolution, Transportation Infrastructure Finance and Innovation Act of 1998, United States Department Of Transportation, Westside Subway Extension/Purple Line Extension Phase 1, Westside Subway Extension/Purple Line Extension Phase 2, Westside Subway Extension/Purple Line Extension Phase 3

Date	Action By	Action	Result
8/25/2016	Board of Directors - Regular Board Meeting
8/17/2016	Finance, Budget and Audit Committee

Meeting_Body
FINANCE, BUDGET AND AUDIT COMMITTEE
AUGUST 17, 2016

Subject/Action
SUBJECT: WESTSIDE PURPLE LINE EXTENSION PROJECT SECTION 2

ACTION: ADOPT A RESOLUTION AUTHORIZING EXECUTION OF AGREEMENT RELATED TO A TIFIA LOAN

Heading
RECOMMENDATION

Title
ADOPT a resolution, Attachment A, authorizing the Chief Executive Officer and other Authorized Officers to negotiate and execute the loan agreement and related documents between LACMTA and the U.S. Department of Transportation related to a $307.0 million Transportation Infrastructure Finance and Innovation Act loan for the Westside Purple Line Extension Project Section 2.

(REQUIRES SEPARATE, SIMPLE MAJORITY BOARD VOTE.)
Issue
ISSUE

The TIFIA loan documents are expected to be ready for execution as early as September, allowing LACMTA to potentially secure attractive loan rates at that time.

Discussion
DISCUSSION

Securing the loan's fixed interest rate as soon as the documents are finalized with U.S. Department of Transportation (USDOT) will provide a hedge against any rise in interest rates during the subsequent several years we would have to draw on the loan. The Transportation Infrastructure Finance and Innovation Act (TIFIA) loan will bear interest at a fixed rate that is set on the day the loan is executed. The interest rate is based on the yield of the U.S. Treasury security of comparable final maturity as our loan, plus one basis point (0.01%). Under current market conditions, U.S. Treasury rates are at or near historical lows making it an excellent time to lock in a long-term fixed rate. Preliminary terms for the Westside Purple Line Extension Project Section 2 (Westside 2) loan are provided in Attachment B. Executing the loan agreement will not commit us to draw on the loan in the event that capital market interest rates are favorable in the future. The Board approved the submission of a TIFIA loan Letter of Interest (LOI) for Westside 2 at its September 2014 meeting, the LOI was submit...