Oops.
The company behind a privately operated Texas toll road that sports the country’s fastest speed limit is dangerously close to defaulting on its debt, according to a credit rating agency.
According to a report released this week by Moody’s Investors Service, the SH 130 Concession Company, which operates the 41-mile southern portion of State Highway 130, is low on cash and scrambling to get an upcoming payment deadline waived,
The private consortium behind the project owes more than $1 billion and lacks the funding to pay off an upcoming debt payment due on June 30, according to the report. The report adds that the company has “depleted all but $3.3 million of available liquidity reserves.”
[…]
The company’s projections for traffic and toll revenue were overly optimistic. In October, Moody’s downgraded $1.1 billion of debt tied to the project by five notches, from B1 to Caa3, considered junk status. The financial situation has not markedly improved, according to the rating agency’s latest report.
“Fiscal 2013 revenue performance was about 60 percent below original forecast and fiscal 2014 is likely to be 70 percent below the original forecast,” the report states.
Company officials are working with the project’s lenders on waiving a portion of this month’s debt payment while not triggering an official default, according to the report. The company is also attempting to restructure its debt based on a new traffic and revenue study, according to the report.
See here, here, here, and here for the background. One hopes this new traffic and revenue study will be more reality-based than the previous ones were. I for one have always thought that the problem here is that this road is out in the middle of nowhere, but hey, I’m no expert, so what do I know? The Highwayman and EoW have more.
I commute from Austin to San Antonio. People are constantly asking me why I don’t take this road. You nailed it, kuff. It doesn’t actually go to either city.
If you need to get from Georgetown to Seguin real fast, then this is the road for you.