Texas Highway's Developers Struggle to Pay Bank Loans
The road with the highest speed limit in the nation — state Highway 130 in Texas — may be making headlines again, this time for its developer going broke, possibly, at some taxpayer expense.
Even with its much-publicized 85 mph speed limit, the toll road is not attracting sufficient traffic for its private developers to pay their bank loans, according to a June 18 report from Moody’s Investors Service.
The road runs 40 miles south from Austin, through an unpopulated area to Sequin, located east of San Antonio and more than 150 miles from Laredo, where I-35 crosses into Mexico.
“At this time, SH 130 has depleted all but $3.3 million of available liquidity reserves and will not have sufficient funds on hand to fully pay the senior loan interest and related swap payments due on June 30,” Moody’s said.
The Federal Highway Administration confirmed that the SH 130 Concession — which also has a $430 million loan from the federal government — notified the agency of its financial problems.
“We’re aware of those issues and we’re working with the project sponsor and others, including the state [Department of Transportation], to figure out what the next steps are,” said FHWA spokesman Doug Hecox. “No decisions have been made, but this is not a surprise and, obviously, we’re going to take whatever measures we can to protect the taxpayers’ interest.” He said that the first payment on the federal loan is not due until June 2017.
TxDOT declined to comment, but under its agreement with the SH 130 investment consortium, the state owns the road and could operate it, if default occurs.
The consortium declined to confirm Moody’s report that it’s trying to restructure its bank loans.
Consortium spokeswoman Megan Compton said Moody’s “routinely assesses” the SH 130 Concession Company as part of its financing requirements and that the recent report was part of that routine.
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|By Michele Fuetsch|
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