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US road link seeks Chinese investors
Date:2014-12-09 18:36 By:hhstrong Hit: HIT
The Pennsylvania Turnpike Commission is hoping to attract Chinese investors to fund half of thecost of a key connection point for the Pennsylvania Turnpike (or road toll) and Interstate 95, amajor highway in the eastern United States.
The commission and the Delaware Valley Regional Center have formed a limited partnership toraise $200 million of the $416 million needed to build an interchange between the two insoutheastern Pennsylvania.

Ideally it wants wealthy foreign investors, including the Chinese, it said, to invest $500,000apiece. In return, the investors can apply to the EB-5 program which grants immigration visas toforeigners who invest at least $500,000 in US projects creating at least 10 jobs.

"We provide the commission with the expertise and resources to manage the investors," said theDVRC's Young M. Ban.

The DVRC is staffed by personnel like Ban who also are employed by the Swarthmore Group, aPhiladelphia-based investment firm created by the DVRC to oversee the partnership with theTurnpike Commission.

"We have successfully filled our first tranche, raising $50 million from 100 investors," said Ban,adding a majority of the investors are Chinese and a second tranche is expected to be launchedsoon.

Investors will be loaning the commission the money over five years, with loans paid off by tollrevenues. The Turnpike Commission has an A1 rating from Moody's and an AA rating from FitchRating Inc, according to the DVRC website.

A report in The Philadelphia Inquirer said the Turnpike Commission will save about $35 million intraditional borrowing costs over the five years and pay 2 percent in annual interest, about half thecurrent rate for municipal bond-borrowing.

Why does the commission have to seek funding from Chinese investors when it collects tolls fromdrivers using the Turnpike on a daily basis?

"The Turnpike's capital program exceeds toll revenues collected, specifically for larger projectssuch as expansion, reconstruction and new interchanges, including the I-95 link," the commissionsaid in an email.

"Therefore, the commission commonly finances larger capital projects by issuing bonds and weuse toll dollars to repay those bonds."
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