Is it possible to defer the payment of debt service on TIFIA credits?
Yes, in many cases TIFIA credit instruments are junior (i.e., subordinate) to the project’s capital markets or commercial bank debt in the priority of its lien on the project’s cash flow. However, in the event of bankruptcy, insolvency, or liquidation, the USDOT is required by statute to have a parity lien with respect to other creditors. The credit agreement will clearly specify the USDOT’s interest in the pledged security relative to other creditors. The figure below shows a typical repayment structure for a TIFIA credit instrument. In this case, the USDOT has granted a deferral of the first TIFIA payment until five years into the operation of the project and after substantial completion. This is midway through the initial 10-year ramp-up period. The figure shows a maximum TIFIA term, with the credit being repaid in full 35 years after the completion of construction.
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