"The first US toll road to tap the federally subsidized TIFIA loan program, has filed for bankruptcy."
NEW YORK, March 24 (Project Finance International) - South Bay Expressway, the first US toll road to tap the federally subsidized TIFIA loan program, has filed for bankruptcy protection. The 9.3-mile electronic tollroad is located in southern California.
Toll collections have been dramatically under projections since the road opened in late 2007. The road is owned by Macquarie (MQG.AX) funds - 50% by Macquarie Infrastructure Partners, the US fund owned by large institutional investors and 50% by the Australian listed Macquarie Atlas Roads.
South Bay Expressway currently has US$340m outstanding of a US$400m construction loan converted into a term loan facility according to bankruptcy filings. The term loan was arranged in 2003 with BBVA (BBVA.MC) as admin agent and Depfa as co-lead, and matures in 2021. Other lenders to the project include Allied Irish, Bank of Ireland, BNP Paribas (BNP.FR), Commonwealth Bank, DVB Bank, DZ Bank and HSH Nordbank.
In addition, South Bay took out a US$140m, 35-year TIFIA loan, under which the first mandatory interest payment was due in 2011. That facility now totals US$170m after the capitalization of US$30m in interest.
South Bay sought bankruptcy protection after attempts to negotiate a settlement with ORC, a contractor to the tollroad, failed to result in a settlement. ORC has made claims totaling US$600m, which is disputed by South Bay Expressway.
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