Meeting_Body
Crenshaw Project Corporation
One Gateway Plaza
Los Angeles, CA 90012
CRENSHAW PROJECT CORPORATION BOARD MEETING
MAY 28, 2020
Subject
SUBJECT: TRANSPORTATION INFRASTRUCTURE FINANCE AND INNOVATION ACT (TIFIA) LOAN
Action
ACTION: APPROVE RECOMMENDATIONS
Heading
RECOMMENDATION
Title
ADOPT a Resolution, Attachment A, that authorizes the prepayment of the TIFIA Loan between the Crenshaw Project Corporation and the United States Department of Transportation and the termination of the TIFIA Loan Agreement and related documents (the "TIFIA Loan Documents").
Issue
ISSUE
Long-term interest rates provide the opportunity to refinance the $545.9 million TIFIA Loan borrowed from the USDOT to partially finance the Crenshaw/LAX Transit Corridor Project (the "Project"). The TIFIA loan is secured by Measure R sales tax revenues allocated to the Project. Issuing tax-exempt bonds secured by Measure R sales tax revenue to refinance the Project's TIFIA loan is estimated to lower debt expense by $10 million. The TIFIA Loan Agreement includes the option to repay the TIFIA loan without penalty or premium.
Background
BACKGROUND
The CPC was formed in March 2012 to act as the TIFIA Loan conduit borrower and the Transportation Investment Generating Economic Recovery (TIGER) II TIFIA Payment grant sub-recipient for the Project. USDOT has disbursed the total $545.9 million TIFIA loan amount. All loan disbursements were advanced to Metro for the purpose of reimbursing the agency for eligible Project expenses.
Discussion
DISCUSSION
The Project realized the primary benefits of the TIFIA Loan during the early construction phase. The early phase benefits included:
* Loan draws based on our actual cash flow needs over time
* Interest did not accrue until the initial draw on the loan
* No prepayment penalty
The low interest rates available in the current market environment present the opportunity ...
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