November witnessed the financial close for Cintra/Meridiam’s $3.5-billion revenue-risk P3 concession to rebuild 22 miles of I-66 in northern Virginia, adding express toll lanes in both directions. The TIFIA loan and Private Activity Bonds were rated investment-grade by both Fitch and Moody’s, and the bonds were over-subscribed.
What a difference three years make! In 2014 the editor of this newsletter cautioned me that toll (i.e., revenue-risk) concessions were on the way out, due to post-recession investor skittishness over several revenue-risk concession bankruptcies, especially that of the Indiana Toll Road. Many observers shared the view that availability-payment P3 concessions were the way forward in this country, and since the initial use of the availability payment (AP) model in 2009 (Port of Miami Tunnel and I-595, both in Florida), nine AP highway projects have been financed.
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