§ 183. — Secured loans.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 23USC183]
TITLE 23--HIGHWAYS
CHAPTER 1--FEDERAL-AID HIGHWAYS
SUBCHAPTER II--INFRASTRUCTURE FINANCE
Sec. 183. Secured loans
(a) In General.--
(1) Agreements.--Subject to paragraphs (2) through (4), the
Secretary may enter into agreements with 1 or more obligors to make
secured loans, the proceeds of which shall be used--
(A) to finance eligible project costs; or
(B) to refinance interim construction financing of eligible
project costs;
of any project selected under section 182.
(2) Limitation on refinancing of interim construction
financing.--A loan under paragraph (1) shall not refinance interim
construction financing under paragraph (1)(B) later than 1 year
after the date of substantial completion of the project.
(3) Risk assessment.--Before entering into an agreement under
this subsection, the Secretary, in consultation with the Director of
the Office of Management and Budget and each rating agency providing
a preliminary rating opinion letter under section 182(b)(2)(B),
shall determine an appropriate capital reserve subsidy amount for
each secured loan, taking into account such letter.
(4) Investment-grade rating requirement.--The funding of a
secured loan under this section shall be contingent on the project's
senior obligations receiving an investment-grade rating, except
that--
(A) the Secretary may fund an amount of the secured loan not
to exceed the capital reserve subsidy amount determined under
paragraph (3) prior to the obligations receiving an investment-
grade rating; and
(B) the Secretary may fund the remaining portion of the
secured loan only after the obligations have received an
investment-grade rating by at least 1 rating agency.
(b) Terms and Limitations.--
(1) In general.--A secured loan under this section with respect
to a project shall be on such terms and conditions and contain such
covenants, representations, warranties, and requirements (including
requirements for audits) as the Secretary determines appropriate.
(2) Maximum amount.--The amount of the secured loan shall not
exceed 33 percent of the reasonably anticipated eligible project
costs.
(3) Payment.--The secured loan--
(A) shall--
(i) be payable, in whole or in part, from tolls, user
fees, or other dedicated revenue sources; and
(ii) include a rate covenant, coverage requirement, or
similar security feature supporting the project obligations;
and
(B) may have a lien on revenues described in subparagraph
(A) subject to any lien securing project obligations.
(4) Interest rate.--The interest rate on the secured loan shall
be not less than the yield on marketable United States Treasury
securities of a similar maturity to the maturity of the secured loan
on the date of execution of the loan agreement.
(5) Maturity date.--The final maturity date of the secured loan
shall be not later than 35 years after the date of substantial
completion of the project.
(6) Nonsubordination.--The secured loan shall not be
subordinated to the claims of any holder of project obligations in
the event of bankruptcy, insolvency, or liquidation of the obligor.
(7) Fees.--The Secretary may establish fees at a level
sufficient to cover all or a portion of the costs to the Federal
Government of making a secured loan under this section.
(8) Non-federal share.--The proceeds of a secured loan under
this subchapter may be used for any non-Federal share of project
costs required under this title or chapter 53 of title 49, if the
loan is repayable from non-Federal funds.
(c) Repayment.--
(1) Schedule.--The Secretary shall establish a repayment
schedule for each secured loan under this section based on the
projected cash flow from project revenues and other repayment
sources.
(2) Commencement.--Scheduled loan repayments of principal or
interest on a secured loan under this section shall commence not
later than 5 years after the date of substantial completion of the
project.
(3) Sources of repayment funds.--The sources of funds for
scheduled loan repayments under this section shall include tolls,
user fees, or other dedicated revenue sources.
(4) Deferred payments.--
(A) Authorization.--If, at any time during the 10 years
after the date of substantial completion of the project, the
project is unable to generate sufficient revenues to pay the
scheduled loan repayments of principal and interest on the
secured loan, the Secretary may, subject to subparagraph (C),
allow the obligor to add unpaid principal and interest to the
outstanding balance of the secured loan.
(B) Interest.--Any payment deferred under subparagraph (A)
shall--
(i) continue to accrue interest in accordance with
subsection (b)(4) until fully repaid; and
(ii) be scheduled to be amortized over the remaining
term of the loan beginning not later than 10 years after the
date of substantial completion of the project in accordance
with paragraph (1).
(C) Criteria.--
(i) In general.--Any payment deferral under subparagraph
(A) shall be contingent on the project meeting criteria
established by the Secretary.
(ii) Repayment standards.--The criteria established
under clause (i) shall include standards for reasonable
assurance of repayment.
(5) Prepayment.--
(A) Use of excess revenues.--Any excess revenues that remain
after satisfying scheduled debt service requirements on the
project obligations and secured loan and all deposit
requirements under the terms of any trust agreement, bond
resolution, or similar agreement securing project obligations
may be applied annually to prepay the secured loan without
penalty.
(B) Use of proceeds of refinancing.--The secured loan may be
prepaid at any time without penalty from the proceeds of
refinancing from non-Federal funding sources.
(d) Sale of Secured Loans.--
(1) In general.--Subject to paragraph (2), as soon as
practicable after substantial completion of a project and after
notifying the obligor, the Secretary may sell to another entity or
reoffer into the capital markets a secured loan for the project if
the Secretary determines that the sale or reoffering can be made on
favorable terms.
(2) Consent of obligor.--In making a sale or reoffering under
paragraph (1), the Secretary may not change the original terms and
conditions of the secured loan without the written consent of the
obligor.
(e) Loan Guarantees.--
(1) In general.--The Secretary may provide a loan guarantee to a
lender in lieu of making a secured loan if the Secretary determines
that the budgetary cost of the loan guarantee is substantially the
same as that of a secured loan.
(2) Terms.--The terms of a guaranteed loan shall be consistent
with the terms set forth in this section for a secured loan, except
that the rate on the guaranteed loan and any prepayment features
shall be negotiated between the obligor and the lender, with the
consent of the Secretary.
(Added Pub. L. 105-178, title I, Sec. 1503(a), June 9, 1998, 112 Stat.
245.)
Section Referred to in Other Sections
This section is referred to in sections 181, 184 of this title.
