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News Jun 20, 2016

Shearman & Sterling Advises US Department of Transportation on Maryland’s $2 Billion Purple Line Light Rail P3 Project

Shearman & Sterling represented the US Department of Transportation (USDOT) in connection with the extension of an approximately US$875 million secured loan for the Purple Line Light Rail Project in Maryland. The loan, issued under the Transportation Infrastructure Finance and Innovation Act (TIFIA) program, will fund project costs for the light rail line, which will extend for 16 miles between Bethesda, in Montgomery County, and New Carrollton, in Prince George’s County. Experts have noted that this transaction could be a template for future US light rail transit deals.

Purple Line Transit Partners (PLTP), the borrower under the TIFIA loan, entered into a public-private partnership agreement in April with the Maryland Department of Transportation (MDOT) and the Maryland Transit Administration (MTA) to design, build, finance, operate and maintain the project over a period of 35 years.  The project is Maryland’s first transit P3.

PLTP is comprised of affiliates of Meridiam (70%), Fluor (15%) and Star America (15%), each of which will contribute equity to the project. The debt financing also includes approximately US$313 million in “green bond” designated private activity bonds (PABs).

The Shearman & Sterling team included partner Cynthia Urda Kassis; counsel Paul Epstein; and associates Monica Lamb, Jackson Murley and Ali Hassanali (all New York-Project Development & Finance).