Project Partners

Jack Fawcett & Associates, Summit

Background

Archetype has been advising the U.S. Federal Railroad Administration in its Railroad Rehabilitation and Improvement Financing (“RRIF”) Program since 2005.  Our team consists of a core set of individuals knowledgeable of rail-based projects who have extensive experience in transaction structuring and credit analysis.  This expertise extends to numerous types of credit instruments and credit structures.  Archetype professionals have hands-on experience in Class I, Class II and shortline railroad related financings, transit system financings, public financings, corporate financings, and commercial bank loans.  This blend of financial and industry expertise has provided the FRA with credit analyses informed by practical industry-based experience.  Over the term of our 10-year engagement with the FRA, we have advised on over 20 applications requesting $10.4 billion in assistance for projects totaling $17.5 billion.  Our services included:

  • Evaluating requests for credit assistance from project sponsors, including each applicant’s background and operational history

  • Analyzing applicant historical financial performance and debt structure

  • Assessing  each applicant's  customers  and  market  trends, analyzing  the  applicant’s competitive environment

  • Determining project risks

  • Developing revenue forecasts

  • Assessing potential impact of RRIF loans on the applicant and its future performance

  • Developing five-year financial pro formas

  • Assessing collateral value of assets pledged by the applicant

  • Assessing applicant’s ability to repay the RRIF loan; and

Challenges & Solutions

Financial Advisor for the Goethals Bridge Replacement Project
Archetype provided assistance to TIFIA in assessing a $423 million loan request to finance part of a $1.4 billion Goethals Bridge Replacement Project. The project involves a P3 between a concessionaire and the Port Authority of New York and New Jersey and includes the development and maintenance of a new bridge to replace the technically obsolete Goethals Bridge. For this engagement, Archetype reviewed the application information, analyzed the project from a credit perspective, focusing on the economic, financial, and risk allocation issues that could affect the financial health of the project. Archetype reviewed the financial model developed by the applicant and introduced modifications to the model to provide outputs that were meaningful in the credit analysis. Archetype developed a number of scenarios for its sensitivity and stress test analysis and analyzed the impact of each scenario on the project’s ability to service debt over the proposed term of the financing. Archetype also developed and negotiated an alternative financial structure that included a shorter tenor and average life for the TIFIA debt as well as an enhanced security package that contained debt service reserves and cash distributions tied to borrower performance.

Financial Advisor for the New York Metropolitan Transportation Authority East Side Access Project
From June 2012, Archetype has assisted the FRA in its assessment of a loan for approximately $3 billion under the RRIF Program for the New York Metropolitan Transportation Authority (“MTA”). Archetype’s team assisted FRA in identifying and analyzing risks and mitigants related to the project, the applicant, and repayability of the RRIF loan. The team reviewed the background, legal structure and risk related to 11 dedicated taxes and non-operating revenue streams. The loan is intended to supplement $2.62 billion of FTA New Starts grants provided to the MTA under its FFGA, awarded in 2006, for financing six components of the East Side Access project (project costs total approximately $8.7 billion), and $817.5 million for the refinancing of existing debt. Subsequent to the submission of a revised application by MTA for a smaller, $967 million RRIF loan in 2014, Archetype provided a refreshed and revised analysis of the applicant and RRIF loan credit.

Financial Advisor to DOT on Denver Union Station Project
As a financial advisor to the TIFIA JPO and the FRA, Archetype performed an assessment of an application from the Denver Union Station Project Authority for two loans under the TIFIA and RRIF Programs. Our team performed a project evaluation, including a comprehensive analysis of the plan of finance and project risks. The plan of finance involved the pledge of tax-increment revenues for the applicant’s obligations. The team analyzed the project economics over the proposed term of the debt and reviewed the project documentation to determine whether the project’s contractual framework supported the project’s financing needs. Additionally, we analyzed the project’s repayability and assessed the revenues pledged to support ongoing principal and interest payments and examined the certainty of pledged revenues, the essentiality of the project to those revenue sources, and the sensitivity of project cash flows to interruptions and/or shortfalls in project revenues. The Archetype team also analyzed the sensitivity of the plan of finance to varying assumptions associated with the project (e.g., delay, interest rate movements, cost escalation).