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Treasurers outline bond and TIFIA options; early years of revenue are critical for borrowing
Summary
Washington and Oregon debt managers presented financing options, modeling state‑backed bond issuance and a potential TIFIA loan; staff said a combined bond/PAYGO approach or a TIFIA loan could meet a $1.5 billion funding request but early toll revenues are most valuable for debt service coverage.
State debt officials explained how different financing strategies could supply the $1.5 billion of project funds identified for the first funded phase.
Jason Richter, deputy state treasurer for Washington, described analyses that modeled two primary approaches: (1) a state‑backed bond strategy (Washington triple‑pledge bonds and Oregon toll revenue bonds backed by the State Highway Fund) and (2) pursuing a Federal Highway Administration TIFIA loan as a standalone revenue loan. He said the bond approach is a known path and lowers administrative burden while a TIFIA loan offers flexible drawdown features, potentially longer terms and less impact on state debt capacity. The Washington model assumed four bond series issued 2030–2035 combined with PAYGO to fill the request.
Ethan Pendleberry (ODOT) summarized Oregon’s contracted analysis (PRAG) that used conservative assumptions (5.5% interest, 30‑year terms, 1.3x minimum coverage) and found scenario 2 can achieve the $1.5 billion request using about $488 million PAYGO and roughly $1.0 billion in bonding, with an average coverage of 2.09x and a minimum coverage close to 1.38x in the later years. Jason and Oregon staff emphasized that early year revenue is most valuable for borrowing and recommended staged issuance and annual updated investment‑grade TNR forecasts prior to each bond sale.
