An Orange County toll road that has struggled to build ridership will be refinanced for a second time -- a move that will add years to the period motorists will have to pay tolls to ride it.
On a 12-2 vote, the board of the San Joaquin Hills corridor approved restructuring at least half of the $2.2 billion in bonds that were sold to build the highway, which courses through the coastal hills from Newport Beach to San Juan Capistrano.
The plan by the Transportation Corridor Agencies in Irvine is expected to improve the road's bottom line, but motorists might have to pay tolls until 2050 to retire the debt.
The new notes, which will have lower interest payments, are scheduled to be sold the week of Oct. 20. But tollway officials say the amount of bonds to be refinanced has yet to be determined.
Though the restructuring will increase the total debt, TCA officials say the plan will lower the highway's monthly interest payments, improve cash flow and increase financial flexibility.
The measure also could protect the highway's credit rating and reduce the pressure to increase tolls.
Voting against the refinance were Orange County Supervisor Todd Spitzer and Laguna Niguel City Councilman Robert Ming, who proposed that the highway's excess revenue be used to retire the existing debt.
But their colleagues who favored the restructuring contended the idea would reduce the tollway's cash flow, eliminate a financial cushion and result in less flexibility to pay for capital improvements.
Since it opened in 1997, the San Joaquin Hills corridor has consistently fallen below its ridership and revenue projections, threatening its ability to keep up with its debt payments.
The current restructuring is the second time the agency has acted to refinance the highway and postpone the day when the road would be free to motorists. A May 2011 refinance pushed back the original payoff date six years from 2036 to 2042.
TCA officials say the San Joaquin Hills corridor now handles about 85,000 vehicles a day and that traffic increased by 5.9% for fiscal year 2013-2014.
They note that two Wall Street ratings agencies have given the lowest investment grade to the bonds to be sold in October, an improvement over previous junk or non-investment grades given to the highway's notes.