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7/13/2005



Rail News: Rail Industry Trends

Tex-Mex lands $50 million RRIF loan



The Federal Railroad Administration (FRA) recently approved a $50 million Railroad Rehabilitation and Improvement Financing (RRIF) loan for the Texas Mexican Railway Co.

The railroad plans to use proceeds from the 25-year loan to upgrade 146 track miles and two yards between Laredo and Corpus Christi, Texas, rehabilitate 26 bridges, construct two and extend one siding, and replace 75,000 ties. The Tex-Mex also will use proceeds to refinance debt incurred from prior infrastructure improvement projects.

After completing the upgrades, Tex-Mex will increase train speeds and have more capacity to accommodate growing NAFTA corridor freight-rail traffic. Owned by Kansas City Southern, Tex-Mex serves as a bridge traffic provider, interchanging with KCS, Union Pacific Railroad, BNSF Railway Co. and TFM S.A. de C.V.

The RRIF program authorizes the FRA to provide $3.5 billion in direct loans or loan guarantees to eligible railroads (including $1 billion set aside for regionals and short lines), state and local governments, and government-sponsored authorities to acquire, develop, improve or rehabilitate intermodal or rail facilities. Funding up to 100 percent of the cost of an approved railroad project, the loans include repayment periods up to 25 years and interest rates equal to federal government borrowing.


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