ACS completes construction on landmark P3 road project

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ACS completes construction on landmark P3 road project

Florida Department of Transportation (FDOT) announced on March 26th the opening of the US$1.2 billion I-595 Express Corridor Improvements Project in Miami.

On March 3rd, 2009, FDOT signed a public-private partnership agreement with I-595 Express LLC, which was owned by ACS Infrastructure, to serve as the concessionaire to design, build, finance, operate and maintain (DBFOM) the project for a long-term commitment of 35 years.

The Transportation Infrastructure Finance and Innovation Act (TIFIA) loan agreement was executed on March 2, 2009 and financial close reached on March 3, 2009. 

On 19 October 2011, ACS sold 50% of its stake in the company that manages the I-595 highway to Teachers Insurance and Annuity Association of America. The deal valued the company at US$588.36 million.

The funding sources for the P3 project were:

  • State and federal resources: Support FDOT's final acceptance payments (US$686 million) and availability payments (US$65.9 million annual Maximum Availability Payment  in 2009 dollars) made to concessionaire.
  • Concessionaire's financing sources for repayment: senior bank debt US$781.1 million, TIFIA loan US$603 million plus capitalized interest during construction, equity US$207.7 million, revenues US$10.0 million, and FDOT qualifying development funds US$232 million.

A total of 12 banks plus TIFIA participated in the final deal. The TIFIA loans at the federal borrowing rate of 3.6% kept the borrowing cost within the bid budget. ACS equity was 12% of the financing at an IRR of 11.5%.

Members of the bank club are Santander, Calyon New York Branch, La Caixa, Société Générale, Dexia Credit Local, New York Branch, Caja Madrid, National Australia Bank Limited, Banco Popular Español, BBVA, Banco de Sabadell, WestLB, and Caixa Nova.

The project advisors & consultants were the following:

  • To Sponsor: Dewey & LeBoeuf LLP - legal, Macquarie Capital (USA) Inc. - financial, and Scott Wilson, Plc. - technical,
  • To Lender: Simpson Thacher & Bartlett LLP - legal,
  • To Authority: Nossaman - legal, Jeffrey A. Parker & Associates, Inc. - financial, Reynolds, Smith and Hills, Inc. - technical, and The Corradino Group - construction oversight,
  • To USDOT TIFIA JPO: Hawkins Delafield & Wood LLP - legal, and Taylor-DeJongh - financial.

The I-595 Corridor Roadway Improvements project consists of the reconstruction and widening of the I-595 mainline and all associated improvements to frontage roads and ramps from the I-75/Sawgrass Expressway interchange to the I-595/I-95 interchange, for a total project length of approximately 10.5 miles. The project passes through, or lies immediately adjacent to, six jurisdictions: City of Sunrise; Town of Davie; City of Plantation; City of Fort Lauderdale; Town of Dania; and unincorporated areas of Broward County.

The project was split into five construction segments. Roadway construction began in Segment C in February 2010 in the vicinity of Pine Island Road. Construction in Segment D started in June 2010. Segments A and B officially got underway in November 2010 and the final segment of the project, Segment E on Florida's Turnpike, started in March 2011.

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