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For Immediate Release

BAY AREA TOLL AUTHORITY LOCKS IN LOW INTEREST RATE ON $300 MILLION IN BONDS FOR BRIDGE WORK

Agency action could save bridge toll-payers millions in interest costs

Contact:

Randy Rentschler
510.817.5780

Joe Curley
510.817.5847

OAKLAND, Calif., Jan.17, 2002 . . . The Bay Area Toll Authority (BATA) announced today that it has converted $300 million in variable-rate bonds to fixed-term obligations, potentially saving millions of dollars in debt payments over the 35-year life of the bonds. The transaction, known as an interest rate swap, allows the toll-bridge financing authority to take advantage of today's low interest-rate market to lock in favorable rates and to remove the risk that rates could go higher in the future.

"This is great news for commuters and other users of Bay Area bridges," said Sharon Brown, councilmember for the city of San Pablo and chair of the Metropolitan Transportation Commission (MTC), which operates BATA. "If we can keep our interest payments low we will have more money to devote to bridge projects that will bring congestion relief to key travel corridors." Proceeds from the BATA bonds, first issued in May 2001, are being used to finance the Regional Measure 1 program of major improvements to Bay Area toll bridges, including new spans for the Carquinez and Benicia-Martinez bridges and a widening of the San Mateo-Hayward Bridge.

"Homeowners with adjustable-rate mortgages often convert to a fixed rate when interest rates are low," said MTC Chief Financial Officer Brian Mayhew. "We're doing the same thing with these bonds. With this transaction, we are getting the peace of mind of a fixed debt payment at a significant discount from traditional price levels."

BATA converted its variable-rate debt to a fixed rate of 4.105 percent, well below the historical average of 5.3 percent for long-term, fixed-rate, tax-exempt bonds. On an annual basis, the difference between these two rates translates into a $2.15 million savings on interest payments at the lower rate. "Factored over the 35-year life of the bonds, these lower interest payments would add up to $45 million in savings in today's dollars, compared to the average," said Mayhew. "We think it's a good time to lock in these low rates."

Regional Measure 1 (RM 1) is the 1988 ballot measure that authorized a standard base auto toll of $1 to fund a $1.6 billion overhaul and upgrade of Bay Area toll bridges and their approaches, along with other traffic-relieving projects. [See Attachment A for a list of the RM 1 bridge projects and their costs.] Responsibility for overseeing the RM 1 program passed to BATA (from the California Transportation Commission) in 1998, at the time of BATA's creation by an act of the California Legislature. The second dollar of the $2 toll now paid by bridge users was added in 1998 to pay for a separate, Caltrans-administered bridge seismic retrofit program, including a new east span of the San Francisco-Oakland Bay Bridge.

BATA negotiated the interest-rate swap with three financial firms: Ambac, Salomon Smith Barney and Morgan Stanley. As structured, the deal does not affect the variable-rate bonds (or the holders of those bonds) directly. Instead, BATA will pay the three firms the agreed-upon fixed interest rate of 4.105 percent in exchange for receiving a variable-rate payment from the firms. This money will be used by BATA to make payments to the actual holders of the underlying bonds. The payments received from the firms are expected to exceed the actual variable-rate payments BATA must make to the bondholders.

When originally issued in mid-2001, the BATA bonds were given top marks for creditworthiness by the major credit rating agencies, receiving 'AA' ratings from Fitch and Standard & Poor's, and an 'Aa3' from Moody's. Standard & Poor's noted in its credit profile that BATA's 'AA' rating "... represents one of the highest credit ratings Standard & Poor's carries on a toll agency, and the highest among all transportation-related enterprises."

MTC is the transportation planning, coordinating and financing agency for the nine-county San Francisco Bay Area. Operating as BATA, the agency also is responsible for the programming, administration and allocation of toll revenues from the $1 base toll on the seven state-owned toll bridges in the region.

NOTE TO EDITORS: Photos of Regional Measure 1 bridge projects may be downloaded from MTC's Web site at http://www.mtc.ca.gov/bridge-photos.htm

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Attachment A

Regional Measure 1 Capital Projects

Project	Cost ($ millions)	Date of Completion
New Benicia-Martinez Bridge – northbound (under construction)	652.8	Dec. 2004
Carquinez Bridge Replacement – westbound (under construction)	479.8	Oct. 2003
Richmond Parkway (complete)	5.9	(complete)
Richmond-San Rafael Bridge Trestle Rehabilitation (under construction)	35.4	Aug. 2005
Richmond-San Rafael Bridge Deck Rehabilitation (under environmental review)	53.4	July 2007
San Mateo-Hayward Bridge Widening (under construction)	217.9	Dec. 2002
I-880/SR-92 Interchange Improvements (under environmental review)	134.2	Dec. 2006
Dumbarton Bridge
Bayfront Expressway (SR-84) Widening (in design)	33.8	April 2004
US-101/University Ave. Interchange Improvement (completed)	3.8	(complete)
Total	$1,617

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