TIFIA Credit Program Overview

Background Reference

Transportation Infrastructure Finance and Innovation Act (TIFIA)

Background on TIFIA

• Strategic goal - to leverage limited Federal resources and stimulate capital market investment in transportation infrastructure by providing credit assistance in the form of direct loans, loan guarantees, and standby lines of credit (rather than grants) to projects of national or regional significance.
• Key objectives
  • 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
• Major requirements
  • Minimum Anticipated Project Costs –
    • $10 million for Transit-Oriented Development, Local, and Rural Projects
    • $15 million for Intelligent Transportation System Projects
    • $50 million for all other eligible Surface Transportation Projects
  • TIFIA Credit Assistance Limit – Credit assistance limited to 33 percent of reasonably anticipated eligible project costs (unless the sponsor provides a compelling justification for up to 49 percent)
  • Investment Grade Rating – Senior debt and TIFIA loan must receive investment grade ratings from at least two nationally recognized credit rating agencies (only one rating required if less than $75 million)
  • Dedicated Repayment Source – The project must have a dedicated revenue source pledged to secure both the TIFIA and senior debt financing
  • Applicable Federal Requirements – Including, but not limited to: Civil Rights, NEPA, Uniform Relocation, Buy America, Titles 23 and 49
• Rolling application process - Applicants must submit detailed letters of interest when a project is able to provide sufficient information to satisfy statutory eligibility requirements, such as creditworthiness  and readiness to proceed; after invitation from the TIFIA Joint Program Office, a formal application is required

Eligible TIFIA Applicants and Projects

Applicants

• State Governments
• State Infratructure Banks
• Private Firms
• Special Authorities
• Local Governments
• Transportation Improvement Districts

Projects

• Highways and Bridges
• Intelligent Transportation Systems
• Intermodal Connectors
• Transit Vehicles and Facilities
• Intercity Buses and Facilities
• Freight Transfer Facilities
• Pedestrian Bicycle Infrastructure Networks
• Transit-Oriented Development
• Rural Infrastructure Projects
• Passenger Rail Vehicles and Facilities
• Surface Transportation Elements of Port Projects

Eligibility Requirements

1. Creditworthiness:
   1. Ability to satisfy applicable creditworthiness standards
   2. Rate covenant, if applicable
   3. Adequate coverage requirements to ensure repayment
   4. Ability to obtain investment grade ratings on senior debt
2. Foster partnerships that attract public and private investment for the project
3. Ability to proceed at an earlier date or reduced lifecycle costs (including debt service costs)
4. Reduces Contribution of Federal Grant Assistance for the Project
5. Construction contracting process can commence no more than 90 days from execution of a TIFIA credit instrument

Program Implementation: Selection & Funding of a TIFIA Project

1. Project Sponsor Submits Letter of Interest on a Rolling Basis
2. If Requested by DOT, Project Sponsor Provides Additional Information, Preliminary Rating Opinion Letter and $250,000
3. Upon Invitation, Project Sponsor Makes Oral Presentation to DOT
4. Upon Invitation from DOT, Project Sponsor Submits Complete Application
5. DOT Notifies Project Sponsor Regarding Completeness of Application No More Than 30 Days After Receiving Application
6. DOT Staff Prepare Evaluation and Make Recommendation to DOT Credit Council
7. DOT Credit Council Provides Recommendation to the Secretary, who Makes Final Determination
8. DOT Notifies Project Sponsor Regarding Project Approval No More Than 60 Days After Delivery of Notice Regarding Application Completeness
9. DOT Issues Term Sheet, Executes Credit Agreement, and Obligates Funds
10. DOT Disburses Funds Upon Satisfaction of Conditions set forth in Credit Agreement

TIFIA Documentation Requirements

1. Major Requirements - Draft EIS circulated (or Categorical Exclusion of FONSI obtained)
2. Major Requirements - Project consistent with state transportation plan and, if applicable, included in metropolitan transportation plan
3. Applications, Approvals, and Funding - Letter of interest provided
4. Major Requirements - Preliminary rating opinion letter obtained
5. Major Requirements - $250,000 provided
6. Major Requirements - Oral presentation
7. Major Requirements - ROD obtained
8. Major Requirements - Project included in STIP
9. Applications, Approvals, and Funding - Project sponsor invited to submit application
10. Applications, Approvals, and Funding - Application submitted
11. Applications, Approvals, and Funding - Project selection made
12. Applications, Approvals, and Funding - Term sheet issued
13. Applications, Approvals, and Funding - Funding obligated
14. Major Requirements - Investment-grade rating on senior debt submitted prior to anticipated closing date
15. Applications, Approvals, and Funding - Credit agreement executed
16. Applications, Approvals, and Funding - Funds disbursed according to terms

TIFIA Program Fees

• Project sponsors must reimburse DOT for the costs of the outside advisors who advise TIFIA on the transaction.
• - This transaction fee generally ranges between $400,000 and $700,000.
• - Fee may vary significantly depending on the complexity of the project.
• Borrowers must pay an annual Loan Servicing Fee, due by November 15, of approximately $13,000.
• DOT may also charge a Monitoring Fee as defined in the credit agreement (to date this fee has not been charged).

TIFIA Approved Projects and Portfolio

Projects Financed by TIFIA

TIFIA JPO Organizational Framework

A solid line connects the Secretary of Transportation to the DOT Credit Council, which consists of:

• Deputy Secretary of Transportation (Chair)
• Assistant Secretary for Budget and Programs/CFO (Vice Chair)
• Under Secretary of Transportation For Policy
• General Counsel
• Assistant Secretary for Transportation Policy
• Director of OSDBU
• Federal Transit Administrator
• Federal Highway Administrator
• Federal Railroad Administrator
• Maritime Administrator
• 3 At-large Members

A solid line connects the DOT Credit Council to the Director of the Office of Innovative Program Delivery, with another solid line connecting the Director of the Office of Innovative Program Delivery to the TIFIA Joint Program Office. A dotted line also connects the Assistant Secretary for Budget and Programs/CFO (Vice Chair) to the TIFIA Joint Program Office.