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75 <br /> Orange County Transit Plan April 25, 2017 <br /> to pay annual debt service, given projected revenue and <br /> recurring operating expenses. GoTriangle's total borrowing to <br /> The assumed interest rate for the limited obligation bonds is implement both the Durham and Orange transit plans <br /> four percent. The bonds will be tax-exempt, and therefore the maintains a minimum net debt service coverage (ratio of <br /> Municipal Market Data (MMD) index was utilized in the analysis revenues less operating expenses over annual debt service) of <br /> of historical rate movements. It is expected the first series of 1.19x for LOBS intended to be repaid by Tax District Revenues, <br /> limited obligation bonds(LOB)will be sold in 2024.Over the last 1.26x for LOBS intended to be repaid by federal grants, and <br /> 5-year, 10-year, 15-year and 20-year periods, average rates for 1.07x for the TIFIA loan. The average net coverage ratios for <br /> the 7-year MMD have been 1.52 percent, 2.12 percent, 2.46 those same categories of borrowing are 2.28x,3.03x, and 2.04x, <br /> percent, and 2.99 percent, respectively. The budgeted rate of respectively. <br /> four percent is higher than the average rates over each of those <br /> time periods, which supports the reasonableness of the Figure 5.4-2 and Figure 5.4-1 show the net debt service <br /> assumption. coverage ratios (DCSR), distinguished by the intended <br /> repayment source. Figure 5.4-2 shows DSCR for the LOBS <br /> The assumed interest rate for the TIFIA loan is 5 percent. Under intended to be repaid by federal grants. Figure 5.4-3 shows <br /> the TIFIA credit program,the TIFIA Loan would have an interest DSCR for the TIFIA loan and LOBS that are intended to be <br /> rate approximately equal to the 30-year Treasury rate at the funded by local transit tax revenues. <br /> time of the loan closing.To receive that favorable interest rate, <br /> minimum credit qualifications are that the loan must be rated Figure 5.4-3 shows the total local transit tax revenue associated <br /> investment grade or be subordinate to an investment grade with Durham and Orange counties as well as GoTriangle's total <br /> credit. The TIFIA loan is expected to be entered into in 2020. projected debt service for the D-O LRT Project. Even as <br /> Over the last 5-year, 10-year, 15-year and 20-year periods, GoTriangle's debt service remains fairly level into the future, <br /> average rates for the 30-year Treasury have been 3.03 percent, revenues available to pay debt service are projected to <br /> 3.66 percent, 4.00 percent, and 4.54 percent, respectively.The continue growing. <br /> assumed 5 percent rate in this plan is higher than the average <br /> rates over each of those time periods. <br /> Given the Plan's focus on significantly increasing transit service, <br /> a key measure of financial health is GoTriangle's ongoing ability <br /> Final Page 51 of 65 <br />