The Joint Powers Authority of the ports of Los Angeles and Long Beach has issued $53.9 million in bonds to finance the construction of a rail yard to handle containerized cargo.
The 30-year bonds, underwritten by Morgan Stanley & Co. of New York, are guaranteed by the Southern Pacific Transportation Co., which will operate the rail yard. The initial interest rate on the bonds is 9.5%.
Construction of the rail yard began in late November and is scheduled to be completed this year. Officials at both ports have predicted that the yard will relieve congestion on nearby freeways because many shippers will no longer have to transport the containers by truck to yards near downtown Los Angeles.
In addition, the officials say the yard, called the Intermodal Container Transfer Facility, will make the ports more competitive with other West Coast ports that have rail yards located near docks and will cut shipping costs considerably.