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Transurban has announced that it has reached financial closure on the 395 Express Lanes project in Virginia (USA) under P3 sheme.

The project will extend the 95 Express Lanes for 13 kilometres north to the Washington DC border, converting two existing high-occupancy vehicle lanes to three high-occupancy toll lanes to provide customers with direct access to Washington DC. 

The 395 Express Lanes project has an estimated investment of US$475 million. 

Debt financing for the project includes approximately US$233 million in private activity bonds (par amount) and a US$45 million loan from the Virginia Transportation Infrastructure Bank. The interest rate on the loan is 3.6%.

The private activity bonds, which were underwritten by Goldman Sachs and JP Morgan in July 18, are divided in two tranches:

• A US$-107.95 million tranche with maturity in 2034 including a 5.00% coupon, 4.309% yield to maturity. 
• A 2040 term bond with a size of US$-127.01 million. This tranche involves a 5.00% coupon, 4.461% yield to maturity. 

Allen & Overy and Hunton & Williams acted as legal advisors for the sponsors. Hunton & Williams also provided advisory for the issuers.

Transurban CEO Scott Charlton, said:

“The 395 Express Lanes project will extend the benefits customers have experienced on the 95 Express Lanes and provide much needed congestion relief in the I-395 corridor. Transurban has worked closely with our government partners to develop a transportation solution that will deliver reliability and travel time savings to drivers as well as supporting jobs in the region.”

In February, Virginia Department of Transportation (VDOT) has reached agreement with Transurban to extend the 395 Express Lanes project in Northern Virginia. 

As we reported in November 2015, Transurban and VDOT started negotiations to provide a structure to progress the 395 Express Lanes project in Northern Virginia, USA. The private company which already operates the 95 and 495 express lanes, will finance, design, build, maintain and operate (DBFOM) the extension along I-395.

Transurban proposal included a extension the 95 Express Lanes for 8 kilometres north to the I-395 and Washington DC border. The project scope includes:

• 8 kilometre Express Lanes extension to I-395 north
• Converting and upgrading the existing High Occupancy Vehicle (HOV) lanes to express lanes from the current Express Lanes northern terminus at Edsall Road to the D.C. line
• Adding a third reversible lane from Edsall Road to just south of Eads Street near the Pentagon
• Improving the Eads Street Interchange and transit and carpool access at the Pentagon
• Adding a fourth regular southbound lane on I-395 between Duke Street and Edsall Road
• Rehabilitating five bridges over I-395
• New sound walls to protect neighboring communities

The 395 Express Lanes project would significantly reduce congestion in the I-395 corridor and increase capacity by adding an additional HOV lane to make three reversible lanes on I-395.