The bank representing the bondholders on the Purple Line construction has agreed to postpone any “enforcement action” until Nov. 30, giving the project’s concessionaire more time to try to reach a settlement with the state, according to project documents.
Industry experts say such a “forbearance agreement” grants a borrower more time to reach a deal — in this case, for the concessionaire to try to salvage the project’s $5.6 billion public-private partnership — to prevent potentially having to default on its debt.
Saving the partnership also would benefit the state, experts say, because the Maryland Department of Transportation wouldn’t have to secure a new private partner to complete the light-rail construction, which would add time and costs.
If the partnership dissolves, the state would have to find another way to finance the remaining $1 billion of construction. MDOT also might have to provide money to the concessionaire to pay off its $313 million in bonds. With early termination costs, that could amount to $367 million, depending on the outcome of the state’s and concessionaire’s lawsuits against each other, according to recent court testimony by MDOT’s chief financial officer. The money could be difficult to find at a time when the state has proposed slashing nearly $3 billion from its six-year capital transportation budget due to the coronavirus pandemic.
Click here to read the rest of the article written by Katherine Shaver over at The Washington Post
