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The CA provides two key alternative means of financing for the remaining costs of Phase 1 should the anticipated FFGA amount not materialize. If the FFGA is not provided, the RTD can either increase the Phase 1 construction payment amounts to cover the unfunded construction costs of Phase 1 within 180 days or notify DTP to use reasonable efforts to secure additional debt and equity financing within 90 days equal to the required financing amount (approximately $412 million of debt and $56 million in equity), in which case the Tabor-secured portion of the availability payment will be increased. Importantly, the CA provides that DTP does not need to pursue such funding if the terms of the additional debt would generate financial metrics and ratios that are inconsistent with the financial model submitted at financial close. Notably, the additional Phase I parity debt must also achieve the same or higher credit rating on DTP's outstanding bonds. If neither option is pursued, then the CA requires the RTD to begin making the Tabor-secured service payments to the concessionaire as if the project were operating. While annual debt service coverage ratios (DSCRs) are sized to achieve a minimum of 1.35x, equity is only locked up if the DSCR or the loan life coverage ratio (LLCR) on the Tabor-secured debt falls below 1.10 times (x) and 1.20x, respectively. However, given the relatively fixed nature of the availability payments and fixed price contracts, the ability for debt service coverage to appreciably fall to this level is remote. In addition, equity distributions are not allowed during the design-build period or if there is an occurrence of either an event of default or a force majeure event. Additional leveraging is protected by two additional bonds tests, depending on the issuer of the debt. In order for the RTD to issue additional Tabor-secured debt, it must meet a 1.5x maximum annual debt service (MADS) test. Should DTP need to issue additional parity debt to complete Phase 1, it must meet a 1.35x MADS test. The transaction also includes a debt service reserve, funded at financial close equal to the projected amount of principal and interest on the PABS for six months. Under a project stress scenario developed by Fitch, in which the revenue commencement date is achieved 18 months later than expected, O&M costs are stressed 10% above expectations, and annual deductions of 2% are applied to the O&M portion of availability payment, DTP can still cover total obligations (annual debt service and O&M expenses) by at least 1.0x. A 2% reduction to the annual payment is based on three performance related events occurring on an annual basis and includes: a full system outage for a 24-hour period; 12 monthly track outages between Peoria and the Denver International Airport for a 10-hour period during the day; and six system and station shutdowns for a 24-hour period due to snowstorms. A copy of the presale report for the transaction will be available on Fitch's website at 'www.fitchratings.com' during the week of July 26, 2010. The application of the following criteria was used to derive the rating of the above referenced bonds: 'Rating Criteria for Infrastructure and Project Finance', dated Sept. 29, 2009; 'Rating Criteria for Availability-Based Infrastructure Projects' dated March 29, 2010. Both are available at 'www.fitchratings.com'. Contact: Vanessa E. Roy +1-212-908-0508, New York; or Emari Wydick +1-312-606-2308, Chicago. Media Relations: Cindy Stoller, New York, Tel: +1 212 908 0526, Email: cindy.stoller@fitchratings.com. Additional information is available at www.fitchratings.com. ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. (END) Dow Jones Newswires July 23, 2010 14:52 ET (18:52 GMT)