Project Financing and Implementation

Three European banks with experience financing long-term toll road concessions issued the Senior Bank Debt as two separate loans, both maturing in 2036. The European banks and the U.S. government, as holders of the senior bank debt and the TIFIA federal credit loan were entitled to be repaid first in the event that the concession failed. In the event of a bankruptcy, the holders of the subordinated debt would be repaid last.

In mid-2012, with traffic volumes far below forecast, Transurban wrote down its $141 million equity stake in the Pocahontas Parkway. By doing so, the company took an accounting loss in that year, but was able to reduce the value of the Parkway in its portfolio.

In May 2014, still facing mounting losses, Transurban transferred ownership of the Pocahontas Parkway to the banks holding its senior debt. The transfer of ownership had no impact on the Parkway's users or the Commonwealth of Virginia, as the 2006 concession agreement remained in effect. Under the name Pocahontas Parkway Operations LLC, the banks contracted with DBi Services, a roadway operations firm based in Pennsylvania, to operate and maintain the Parkway.

As part of the restructuring, the TIFIA Credit Program sold its interest in the project to two American banks, TPG Capital and Citibank for approximately $60 million, only 40 percent of its original $150 million loan. The TIFIA Program was not interested in participating in the long-term operation of the road and recognized that it would be unlikely to recover its investment in the near term. Following the transfer of ownership, several of the debt holders sold their stakes to other banks, recognizing the high risk of failure that came with a potential for a high return on investment.

In August 2015, Macquarie Capital, an Australian toll road developer, bought a 50 percent stake in the Pocahontas Parkway from the banks holding the Parkway's debt. Macquarie made the investment because it believed it could derive financial rewards in the later years of the concession. Rather than borrowing money to purchase its stake in the Parkway, Macquarie used its own equity. This would have allowed it to generate a return on investment sooner than it would if it had debt to repay. Nonetheless, Macquarie, TPG, and Citibank sought bids for the concession in 2016, and with VDOT's approval, reached agreement in October 2016 to sell the concession to Globalvia, a Spanish toll road investor and operator, for a reported $600 million.

Through all these ownership transfers, the terms of the original concession agreement have remained in effect.