Using Advance Refunding of Federal Loans to Support Transportation Infrastructure Asset Management and Delivery: Lessons from the Covid-19 Pandemic

The onset of the Covid-19 pandemic laid bare the fragility of many transportation infrastructure projects. In the United States alone, several public-private partnership (P3) projects were delayed, put on hold, or cancelled altogether because of the pandemic while many others remain at risk [1 – 2]. Significant declines in transportation-related revenues have also left state and local governments fiscally constrained [3 – 4]. As a result, the U.S. Department of Transportation (USDOT) has received growing “interest from existing borrowers to refinance their loans to help mitigate pandemic-related revenue loss and to take advantage of low interest rates” [5]. This has led to a flurry of “advance refunding” activity over the last year at the Build America Bureau—the U.S. federal government’s single point of coordination for state and local governments, transit agencies, railroad companies, special authorities, special districts, joint ventures, public-private partnerships, and private entities looking to secure transportation infrastructure financing [6 – 12]. Advance refunding involves issuing a new bond or loan at a lower interest rate to replace an outstanding bond or loan. The proceeds are typically invested in an escrow portfolio of Treasury securities whose cash flows pay off the outstanding issue until the call date [13]. This effectively results in immediate cashflow savings [14]. For example, an advance refunding loan from USDOT to the Central Texas Regional Mobility Authority in March 2021 will save the Authority more than $80 million in interest [12]. From an asset management perspective, we are interested in studying the Build America Bureau’s use of advance refunding as a means of addressing pandemic-related budgetary problems in transportation projects. Using an exploratory, case-oriented approach, the proposed research will specifically pursue the following objectives:

  • Supplemental Notes:
    • GMU Federal Share $75,000 GMU Match Share $75,000


  • English


  • Status: Active
  • Funding: $150000
  • Contract Numbers:


  • Sponsor Organizations:

    Office of the Assistant Secretary for Research and Technology

    University Transportation Centers Program
    Department of Transportation
    Washington, DC  United States  20590
  • Managing Organizations:

    Center for Integrated Asset Management for Multimodal Transportation Infrastructure Systems (CIAMTIS)

    Pennsylvania State University
    University Park, PA  United States  16802
  • Project Managers:

    Donnell, Eric

  • Performing Organizations:

    George Mason University

    School of Engineering
    CEIE Dept., MSN-6C1
    Faifax, VA  United States  22030
  • Principal Investigators:

    Gifford, Jonathan

    Casady, Carter B

  • Start Date: 20220104
  • Expected Completion Date: 20231231
  • Actual Completion Date: 0
  • USDOT Program: University Transportation Centers

Subject/Index Terms

Filing Info

  • Accession Number: 01835223
  • Record Type: Research project
  • Source Agency: Center for Integrated Asset Management for Multimodal Transportation Infrastructure Systems (CIAMTIS)
  • Contract Numbers: 69A3551847103
  • Files: UTC, RIP
  • Created Date: Feb 2 2022 11:16AM