LOS ANGELES — The Foothill-Eastern Transportation Corridor Agency, Calif. priced a $2.3 billion toll revenue bond refinancing on Dec. 12.

The agency was able to restructure its debts after securing permission from the California Department of Transportation to extend the toll agency's authority to toll its 36 miles of highway by 13 more years to 2053.

A report from California Treasurer Bill Lockyer warned in July that without the refinancing the authority was in danger of defaulting on its bonds.

The board of directors had authorized the agency to accept up to a 6.5% interest rate, they were able to achieve 6.06% on the refunding, said Amy Potter, Transportation Corridor Agencies' chief financial officer in a release.

Yields on the senior-lien Series 2013A ranged from 3.75% on a 2020 Series 2013A maturity with Assured Guaranty insurance to 7.125% for a 2042 maturity without insurance, according to Thomson Reuters

The deal was split between investment-grade and speculative-grade ratings.

Standard & Poor's, Fitch Ratings, and Moody's Investors Service rated the Series A and B bonds BBB-minus, BBB-minus, and Ba1, respectively. The ratings agencies assigned the junior lien Series C bonds BB-plus, BB-plus and Ba1 ratings.

"The restructuring brings the agency's debt in line with current revenue projections and strengthens our financial outlook," Potter said.

The annual growth rate for debt service has been reduced from 4.2% to 3.75% and the peak debt service has been reduced by $74 million, to $224 million from $298 million, said Potter, achieving the goal announced prior to the sale.

Foothill/Eastern will have $2.4 billion in outstanding debt including $180 million series 1995A bonds that aren't callable.

The agency originally planned to refinance the debt on July 8, but it took longer than expected to reach the agreement with the Caltrans to extend tolling authority.

"Our toll revenues and our transactions have recovered strongly from The Great Recession and in the last three years have seen a steady increase," said Neil Peterson, CEO of the Transportation Corridor Agencies.

Barclays Capital Inc. and Goldman, Sachs & Co. acted as joint book runners. Stradling Yocca Carlson & Rauth is bond counsel. Public Financial Management, Inc. is the financial advisor.

The bonds were sold in three series with two senior offerings and a junior lien series.

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