The leaders of Orange County’s largest toll road network on Thursday approved a $2.4-billion bond sale to refinance one of its highway corridors -- a move that will probably extend the number of years drivers will be forced to pay to use the tollway.
The restructuring could shore up the operation’s sagging finances but would add 13 additional years of toll-paying -- meaning the Foothill-Eastern system would not become a free road until 2053. The corridor includes the 241 and 261.
The Foothill-Eastern, which slices through the hills of Orange County, have been battered by poor ridership just as its debt payments have been increasing. Last year, the state said it would open an inquiry into the county’s entire 51-mile network of toll roads.
By taking advantage of today’s lower interest rates for borrowing, Transportation Corridor Agencies officials say the refinancing will protect the agency’s credit rating, reduce the pressure to increase tolls and lower the annual growth in debt payments from 4.4% to 3.5% or less. Cash flow also could improve, providing additional money for projects.
The restructuring, however, will extend the date to pay off the Foothill-Eastern’s bonds from 2040 to 2053.
The board of the Foothill-Eastern corridor voted 12 to 1 to approve the bonds. Director Bob Baker, a San Clemente councilman, cast the only no vote, saying he was concerned the TCA was extending its debt longer than originally planned.
Rating agencies have given the TCA bonds the lowest investment grade, except for $206 million in notes that have received a speculative or junk rating. The bonds cannot be sold until Caltrans, which maintains the toll roads, approves a new cooperative agreement with the agency.
Tolls in Orange County -- which cost nearly $11 for a round trip on the San Joaquin -- are among the highest in the nation on a per-mile basis. Though ridership on the San Joaquin has never reached projection, tolls on the road have been hiked at least a dozen times since 1996.