Traffic and Revenue, Debt Service Projections and Credit Risk Modeling for TIFIA
HDR has consulted frequently to the Federal Highway Administration's Program Office of Transportation Infrastructure Finance and Innovation Act (TIFIA) on risk-based revenue and credit forecasts. As part of its due diligence to ensure adequate protection against default, TIFIA utilizes risk assessments of the borrower's forecast of net revenues pledged to repay the TIFIA loan. The assessment provides TIFIA with an independent view of the likelihood that project revenues will meet TIFIA debt service coverage requirements throughout the life of the loan. HDR's probabilistic traffic and revenue forecasts, debt-service projections and credit risk models for toll roads are routinely employed directly in TIFIA credit decisions and positioning strategy. For engagements with TIFIA, HDR:
- Develops frequentist and Bayesian probability distributions for all variables and risk factors;
- Employs advanced, interactive and visual probability elicitation tools in workshops;
- Organizes and facilitates peer review/risk assessment workshops, including advance distribution of reference materials and workbooks; and
- Develops probabilistic computer models to perform Monte Carlo simulation, using the probability ranges for each key variable to assess its impact on the forecast revenues.
Projects have included:
- SH -121—Collin and Denton Counties, Texas
- LA-1 Leeville Bridge—Leeville, La.
- Central Texas Turnpike—Austin, Texas
- SR-125—San Diego County, Calif.
- Car Rental Facility—Miami International Airport, Miami, Fla.
- ReTrac Project Tax Revenue Forecasts—Reno, Nev.
- Professional Services: Funding & Finance Services
- Related Projects: Transportation