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Lenders step up on South Bay
01 March 2010
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Lenders to the South Bay Expressway have been drawn into the litigation between the project company and its contractor, as debtholders move closer to taking control of the road. South Bay, or SBX, formerly known as SR-125, was the first greenfield road PPP to close in the US, and the first private road project to use a TIFIA loan.
The outcome of the discussions about the project's restructuring will show how robust private concessions can be in the face of revenue weakness. It is also likely to be the first test of the springing lien that TIFIA loans hold over projects – that TIFIA is subordinate in terms of cashflow but would rank pari passu in the event of default. SBX is subject to $140 million in TIFIA debt, although commercial lenders are taking the lead in the litigation.
BBVA is administrative agent on $340 million in senior bank debt, and...
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