Re-Financing in the State of Fruits and Nuts -- This is NOT a Bakken Story

First some data points / background (some of the data points are direct quotes from today's story in the LA Times):

The ports of Los Angeles and Long Beach (two separate ports located right next to each other) are the busiest container ports in the United States. The ports handle almost twenty (20) percent of the nation's Asian imports. The ports are now the nation's busiest gateway for international trade in part because of something called the Alameda Corridor.

The Alameda Corridor takes freight trains from the Los Angeles - Long Beach Ports to connect with transcontinental rails: The $2.4-billion Alameda Corridor enables freight trains to travel from the ports to the transcontinental yards near downtown Los Angeles in 30 minutes, down from four hours on the meandering track they previously used.

The ports of Los Angeles and Long Beach are celebrating one of their biggest one-year increases in trade in the last 25 years. That means it's also a good year for the Alameda Corridor, a 20-mile express route built to speed the flow of cargo from the ports to the region's railroad hub and on to retail shelves across the U.S.

Moody's has cut Alameda Corridor's debt rating despite a very, very strong year due to heavy debt load that needs refinancing. This puts the corridor in a bind: Its bonds were downgraded in part because it hadn't yet refinanced its debt, and now refinancing is complicated by the downgrade.

The Corridor has several places to obtain new financing, but the Corridor authority's governing board had hoped to refinance its debt by the end of the year through a Federal Rail Administration loan. But on Dec. 14, federal officials said a decision had been postponed pending "further discussions ... concerning the terms of the proposed loan."

Comment:

Okay, this is the same government / administration that just called in twenty CEOs to discuss ways of putting folks back to work and to chastise American corporations for not putting their huge piles of cash to work. This is the same government that has bailed out the banks on Wall Street, General Motors, and state pension plans across the country.

And now, when offered an opportunity to re-finance one of the most important transportation hubs in the US, it balks, it delays, it ... And it's not a bailout. The government will be getting a great return on its money. I am flabbergasted this has even become a story. It was the lead story in the business section in today's LA Times. The second story was the huge liability costs for Toyota following recalls and acceleration problems in their coal-powered cars.

Anyway, I find this incredible. The refinancing is not simply to refinance debt for a better rate, but the money will go toward major improvements in the corridor, making the Corridor better and putting more people to work. It might help if "they" said this was a "green energy" project. It might help to bring in Steven Spielberg to re-brand the corridor.

I can't make this stuff up.