Stockton Port District RRIF Loan Application – Stockton, CA

The Stockton Port District (Port) is a full-service inland port facility that is able to provide berthing, loading, and unloading of sea and barge vessels, warehousing/ logistics, product handling/ packaging, and inland transportation by all of the principal surface transportation modes: rail, truck, and pipeline.

The Port submitted an application to the Federal Railroad Administration (FRA) for a Railroad Rehabilitation and Improvement Financing (RRIF) loan to finance a rail yard expansion within the Port and to cover a 10% contingency on construction costs. The construction program consists of constructing five new 3000 ft. tracks for interchange and yard classification on the Port’s East complex. The new rail infrastructure was intended to support the Port’s growth and alleviate current capacity constraints by connecting the docks and terminal operators to the Class I rail network to better handle goods that move through the Port.

Project Finance Advisory Limited (PFAL) was mandated in March 2015 by FRA to conduct an analysis and review of the Port’s RRIF loan application. PFAL analyzed the Port’s past operating revenues, existing debt commitments of the Port, project delivery history and customer base to develop a financial model to forecast future operating revenues for build and no-build scenarios. The model stress tested the Port’s ability to repay the loan to help support PFAL’s recommendations to the RRIF lender on the Port’s credit quality. PFAL’s analysis provided the RRIF lender key credit points and recommendations for the U.S. Federal Railroad Administration’s Credit Council loan evaluation. PFAL assisted with negotiations and review of the FRA credit committee.