Project Finance

Mercator has served as financial advisor to governmental, corporate and non-profit sponsors of infrastructure projects. Our principal focus is the transportation sector; representative engagements have included a marine cargo facility acquisition, a major new transit line, and a state turnpike authority capital program.

LA Metro 30-in-10 Program

Mercator is serving as Federal Financial Policy Advisor to the Los Angeles County Metropolitan Transportation Authority (Metro) to assist in pursuing various forms of federal financial assistance in connection with its acceleration of Measure R projects. The program entails accelerating the completion of 12 transit projects and many highway projects in Metro's 30-year long-range plan over the next decade, through innovative financing and project delivery techniques.

In November 2008, voters in Los Angeles County approved by an over two-thirds majority the adoption of Measure R, which established a new ½ cent countywide sales tax for 30 years. Thirty-five percent of the net revenues generated are dedicated to public transportation capacity expansion projects. It is anticipated that this portion of Measure R will yield nearly $13 billion in resources to be available for pay-as-you-go outlays and/or debt service associated with financing the program. Another 20 percent of revenues are dedicated to highway projects

Mercator is providing Metro with on-going strategic advice regarding existing and potential federal funding and financing opportunities to support the successful implementation of the program. Specifically, Mercator is tasked with identifying the range of potential grant, credit, tax incentive and regulatory strategies for federal participation under existing, emerging and proposed federal programs. We also are developing legislative language as may be necessary to implement the preferred mix of tools and strategies, along with accompanying federal policy justifications.

Dulles Metrorail Project Financing

The Metropolitan Washington Airports Authority (MWAA) retained Mercator in 2007 as financial advisor for its Dulles Corridor Metrorail Project. The project is a 23.1-mile extension of the Washington Metropolitan Area Transit Authority (WMATA) transit system to Dulles International Airport. MWAA assumed responsibility for financing and constructing the Metrorail Extension pursuant to an agreement with the Commonwealth of Virginia executed in December 2006. Upon completion, the rail facility will be operated and maintained by WMATA.

Over half of the estimated $6 billion capital cost for the Metrorail Extension is expected to be funded by leveraging net revenue generated by the Dulles Toll Road, an existing toll road in the service area. A unique public-public partnership of federal, state and local governments will provide the balance of the capital funding from various sources, including property taxes generated by special tax districts formed by commercial and industrial property owners in the corridor.

To date, Mercator has served as financial advisor on two toll road revenue bond issues with an aggregate par amount of $1.3 billion. The inaugural issue of $963 million of Dulles Toll Road revenue bonds that closed in August 2009 received Bond Buyer "Deal of the Year" recognition. The Airports Authority successfully closed on $343 million of Dulles Toll Road Revenue Bonds, Series 2010, in May 2010.