California road agency risks default - State Treasurer

SAN FRANCISCO, July 3 Wed Jul 3, 2013 1:21pm EDT

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SAN FRANCISCO, July 3 (Reuters) - The Foothill-Eastern Transportation Corridor Agency, a road toll operator in Orange County, California is at risk of defaulting on its bond payment obligations, State Treasurer Bill Lockyer said on Wednesday.

"Without the refinancing, the risk of default is unacceptably high, threatening negative consequences not only to the agency and its bondholders, but to local governments and the state as well," Lockyer said in a letter accompanying a report proposing a $2.2 billion debt restructuring.

The agency's toll roads, built with proceeds from toll-revenue bonds issued in the 1990s, have not seen projected growth rates in traffic and toll collections, which are below the level needed to keep up with increases in future debt service, the report said.

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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