Indiana Toll Road Seeks Bankruptcy as Traffic Declines

[Purveyor]

By Michael Bathon Sep 22, 2014 11:46 AM ET

The operator of the Indiana Toll Road, owned by affiliates of Macquarie Group Ltd. (MQG) and Ferrovial SA (FER), sought bankruptcy protection with a creditor-supported restructuring plan after dwindling traffic soured a $3.8 billion bet on a 75-year lease.

The company listed assets and liabilities of more than $1 billion each in its Chapter 11 filing yesterday in Chicago bankruptcy court. The company has an estimated $6.3 billion in secured obligations when including projected amounts of interest through next August, according to court papers.

“The global economic recession stifled interstate commerce, which depressed the interstate trucking activity that accounts for a significant part of the toll road’s revenues,” Fernando Redondo, the company’s chief executive officer, said in a court filing.

The Indiana road company isn’t the first to seek creditor protection since the financial crisis. Operators of the South Bay Expressway, a 10-mile toll road near San Diego, and the 16-mile Southern Connector in Greenville County, South Carolina, each filed for bankruptcy in 2010 after experiencing low traffic.

Missed Projections

Even though earnings “increased every year between 2008 and 2013, they were lower than projected,” forcing the company to devote an ever-greater share of operating income to debt service, Redondo said.

more...

http://www.bloomberg.com/news/2014-09-22/indiana-toll-road-seeks-bankruptcy-as-traffic-declines.html

[elleng]

1. Such a GOOD idea, 'Own a Highway!'

[santamargarita]

2. Of course...what could go wrong?

[DavidDvorkin]

3. When I lived in Northern Indiana decades ago

There was no feasible alternative for high-speed east-west travel. The toll road was it.

I was there again a few months ago, and there are a lot of Interstates and other high-quality roads. You can get around quickly without paying a toll.

[DAMANgoldberg]

6. Former trucker here.

US 30 over to Fort Wayne is 4 lanes and expressway. A bit out of the way, but worth it, unless you were going to points closer to the toll road and ohio turnpike.

[DavidDvorkin]

9. On my recent trip to Indiana

I was using US 20 to go back and forth between Elkhart and South Bend. Another nice, free alternative. I noticed a lot of trucks using it.

[DAMANgoldberg]

10. US 20 is a route that some use...

David, I have worked for companies that decided to pay the tolls, so there was no diversion. But US 20 and US 6 are two-lane roads for the most part, and that is why I didn't mention them. Virtually every US and Indiana state highway are part of the National Network, which means a truck route. Some of them even go through city/town centers, which is stupid, but that's their planning. Personally, I don't mind taking a bypass, because in the long run, it shouldn't be the difference between profit and loss on a run. If it is, you're in the wrong business.

[DavidDvorkin]

11. Since I was only going back and forth between South Bend and Elkhart on US 20

I didn't have to worry about town centers. It was a huge improvement between the old route 20 that I used to take, long ago. Or the toll road.

On that stretch, it's a four-lane expressway. I think it becomes two lanes somewhere east of Elkhart.

[PeoViejo]

4. Using Revenue to service Debt

I bet that little went to maintenance, let alone, upgrades. Well, they sucked all the Blood they could out of it, now the State will get it back.

[tartan2]

5. Oh. Privatization at it's best!!!!!!

[Aristus]

7. I guess the "magic of the marketplace" took care of that entrepreneurial endeavor...

[silvershadow]

8. That toll road should have been renamed the Mitch Daniels Highway. nt