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Does the U.S. DOT provide approaches to TIFIA repayment that help the borrower manage uncertain cash flows?

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Does the U.S. DOT provide approaches to TIFIA repayment that help the borrower manage uncertain cash flows?

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Answer In a number of TIFIA transactions, the U.S. DOT has allowed alternative repayment schedules in the form of simultaneous scheduled debt service (due if funds are available) and mandatory debt service (a lower amount established to reduce the likelihood of payment default, see Fall 2006 IFQ) to address the vulnerability of project financings to uncertain activity and revenue performance. The flexible amortization structure, used in Florida DOT’s TIFIA loan for the Miami Intermodal Center Rental Car Facility, takes this approach a step further. In this loan, repayments of principal are based on a percentage of funds available rather than a fixed schedule of amortization. To ensure the loan will be repaid within its 35-year maturity, the parties calculate annually a forward-looking project life coverage ratio (PLCR), defined as the net present value of project resources divided by project obligations, to determine whether rate increases or additional revenues are needed. The unique

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