Toll Agency Approves $1.75 Billion Plan to Refinance Its Debt

Orange County toll road officials on Thursday unanimously approved a refinancing plan that could raise as much as $1.75 billion for the Foothill and Eastern toll roads, clearing the way for a sale of bonds as soon as Monday.

The refinancing will extend the length of the bonds by five years to 2040 and should make it easier for the Transportation Corridor Agencies to meet debt service payments on the roads, saving the agencies at least $300 million over the next decade.

The new bonds will replace about $1.5 billion in bonds issued in 1995 in order to build the roads. The refinancing comes as revised projections for the roads show less traffic and revenue than was originally estimated. Toll road officials have attributed the gap to overly optimistic economic forecasts for the region and lower-than-expected inflation.

Toll road board members praised the more conservative projections at the board meeting Thursday.

The 24-mile Eastern toll road opened in October 1998, 14 months ahead of schedule. The final 3.2 miles of the 12-mile Foothill North toll road opened in January.

The new bond sale will mark the second time toll road officials have refinanced their roads. A $1.4 billion refunding of the San Joaquin Hills toll road took place in 1997, less than a year after the road opened to significantly less-than-expected traffic.