iii.  Federal Credit Policies

In some cases, subordinated debt or a local government guarantee of debt may make a difference between a project's success and failure.[311] For example, the Orange County Transportation Authority's financial commitment to the SR 91 project, in the form of subordinated debt representing approximately six percent of total financing, was important to the project.[312] The risk acceptance signaled to private lenders that the public sector was committed to the project.[313] The Federal highway program has three programs that have helped to leverage Federal and State funds as discussed in Chapter III of this report. As discussed in the previous section regarding Federal funding (Section D), Federal requirements imposed on these programs do discourage the use of Federal funding, including Federal credit programs, by private entities. While two of these three programs, Transportation Infrastructure Finance and Innovation Act (TIFIA) and State Infrastructure Banks (SIBs), provide benefits that can facilitate public-private partnerships, some limitations and concerns have been identified as discussed below.

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