Grant Anticipation Notes (GANs) or Bonds have been used by public transportation agencies in the same way as States have used GARVEEs. The mechanism was first used in the early 1990's, when the Tri-County Metropolitan Transit District (Tri-Met) in Portland, Oregon leveraged a $1 million loan with the anticipation of a $35 million grant for its new light rail system. Due to its relatively high cost and complexity, the mechanism was not used again until TEA-21 was enacted. Minimum Guaranteed Funding Levels and mass transit account funding provided the economic security that financial markets demanded. Since 1997, over $2.5 billion in GANs have been issued for mass transportation, as shown in Figure 2.7.
Figure 2.7
Transit Grant Anticipation Bond Issuances
Issuer | Series | Amount (Million) | Security | Underlying Rating | Term |
New Jersey Transit | 1997A | 139.0 | FFGA - $604 mm | AA |
|
New Jersey Transit | 2000A | 284.9 | FFGA - $604 mm* | A- | 2000-2004 |
New Jersey Transit | 2000B | 450.0 | FFGA - $500 mm |
| 2004-2011 |
New Jersey Transit | 2000C | 110.0 | FFGA - $142 mm |
| 2002-2005 |
New Jersey Transit | COP1999A | 160.0 | Sec. 5307 | A, A1 | 2001-2008 |
New Jersey Transit | COP2000A | 234.0 | Sec. 5307 |
| 2000-2014 |
New Jersey Transit | COP2000B | 493.0 | Sec. 5307 |
| 2000-2013 |
New Jersey Transit | COP2002B | 94.0 | Sec. 5307 |
| 2002-2015 |
City of Phoenix | 2000 | 18.3 | Sec. 5307 & 5309 | AA | 2000-2012 |
Bay Area Rapid Transit (BART) | 2001 | 385.0 | FFGA - $750 mm |
|
|
Port Authority Pittsburgh | 1999 | 70.0 | Sec. 5309 fgm |
|
|
Chicago Transit Authority | 2003A | 128.8 | FFGA - Blue line | A- | 2003-2006 |
Chicago Transit Authority | 2003B | 78.5 | FFGA - Blue line | A- | 2003-2005 |
Total To Date |
| $2,506.4 |
|
|
|
*Note: These bonds refinance the 1997A for Hudson-Bergen I
The 1997A bonds are not included in the Total to Date.
The interesting characteristic of these GANs is that they are being issued on a sole pledge basis. That is, the public transportation agency is pledging solely the anticipated Federal grant receipts. In most cases, the agency has no authority to pledge the full faith and credit of the State, and there are often restrictions on the use of dedicated local revenues such as sales taxes. Thus GANs have represented a significant increase in capability for public transportation agencies as they seek to complete major capital projects as close to on-time and on-budget as possible.