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Iowa Pacific lands $64.4 million RRIF loan

Iowa Pacific Holdings L.L.C. recently received a $64.4 million Railroad Rehabilitation and Improvement Financing (RRIF) loan from the Federal Railroad Administration (FRA).

The company will use proceeds — coming from the only RRIF loan issued by the FRA so far this year — to pay off a bank debt and help fund upgrades to 200 miles of track operated by its Texas-New Mexico and West Texas & Lubbock railroad subsidiaries.

The track upgrades will reduce slow orders, improve handling of hazardous-material cars, and enable the railroads to operate longer and heavier trains, according to Iowa Pacific, which owns six U.S. short lines. The company has contracted Balfour Beatty Rail to complete the upgrades.

“The RRIF projects are the last major rehabilitation needed on our lines,” said Iowa Pacific President Ed Ellis in a prepared statement.

The RRIF program authorizes the FRA to provide direct loans and loan guarantees up to $35 billion, with $7 billion set aside for regionals and short lines. Loans can be used to acquire, improve or rehabilitate intermodal or rail equipment or facilities, including track, components of track, bridges, yards, buildings and shops; refinance outstanding debt incurred for those purposes; and develop or establish new intermodal or rail facilities.

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More News from 12/11/2009