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Debt Program

Outstanding Debt

Metro issues long-term debt primarily to finance a portion of the capital costs of the County transportation system. The majority of Metro’s long-term debt has been issued to fund the costs of the regional rail system, including right-of-way acquisitions and system construction costs, and is secured by Proposition A, Proposition C and Measure R sales taxes.

Metro has also issued long-term debt to finance vehicle purchases, to provide funding to the Alameda Corridor Transportation Authority’s rail corridor project, to construct the transit center and parking structure located at Union Station, to implement various highway improvement projects and to construct Metro’s headquarters building.

Los Angeles County Metropolitan Transportation Authority Outstanding Debt July 1, 2017
Proposition A - 1st Tier Senior Bonds $820,130,000
Proposition C - Senior $1,434,255,00
Measure R - Senior $1,145,995,000
General Revenue $97,610,000
Proposition A - Commercial Paper $183,693,000
Proposition C - Commercial Paper $10,309,000
Proposition C - Revolving Credit Facility $45,000,000
Measure R - Short Term Obligations $210,000
Total Debt $3,737,202,000

Sales Tax Revenue Bonds
are paid from Proposition A, Proposition C and Measure R sales tax revenues and were issued to provide funds for the acquisition and construction of major capital projects, such as rail construction, land acquisition and highway improvements.

Sales Tax Revenue Refunding Bonds are also paid from Proposition A and C sales tax revenues. These bonds were issued to refinance previously issued sales tax revenue bonds at more favorable interest rates, thereby reducing Metro’s debt service costs.

Redevelopment and Housing Bonds have been issued by the Community Redevelopment Agency of the City of Los Angeles (CRA). Metro entered into an agreement with the Community Redevelopment Financing Authority (CRFA) of the CRA to pay a portion of the debt service for these bonds. Metro pays its portion of debt service from a subordinate pledge of Proposition A sales tax revenues.

General Revenue Bonds were issued to finance the cost of the 27-story headquarters building for Metro and to finance Metro’s workers’ compensation obligations. The bonds are primarily repaid from farebox revenues.

Grant Revenue Bonds were issued to provide "bridge funding" for the Gold Line Eastside Extension project. The bonds were repaid from 49 U.S.C. Section 5309 New Start grant revenues paid to Metro by the U.S. Department of Transportation Federal Transit Administration.

Commercial Paper Notes are issued by Metro to fund capital projects on a short-term basis prior to being permanently financed with long-term bonds or receiving grant funding. Metro issues both taxable and tax-exempt commercial paper notes, with original maturity dates ranging from one to 270 days, at various interest rates. Under the terms of the notes, Metro can roll-over the principal amounts due for additional periods.

Debt and Interest Rate Swap Policy

Metro Board of Directors (Metro Board) regularly adopts a formal Debt Policy . The purpose of the Debt Policy is to establish guidelines for the issuance and management of Metro debt. This policy confirms the commitment of the Board, management, financial advisors and other decision makers to adhere to sound financial management practices, including full and timely repayment of all borrowings and achieving the lowest possible cost of capital within prudent risk parameters.

Metro Board also regularly adopts an Interest Rate Swap Policy to establish guidelines for the use and management of interest rate swaps. The Interest Rate Swap Policy requires Metro to evaluate the risks, on an on-going basis, of its existing interest rate swap transactions.

Bond Ratings

Metro's long-term bond ratings for certain lien levels are shown in the table below.

Moody's S&P Fitch
Proposition A
First Tier Senior Aa1 AAA
Proposition C
Senior Aa2 AA+ AA
Measure R Aa1 AAA -
General Revenue Aa2 AA -

Links to Rating Agencies

Metro offers these rating agency links because the rating agencies provide information and additional perspectives relating to financial matters. Metro makes no representation or warranty of any kind with respect to these Web sites or their content and does not maintain, operate or take responsibility for what appears on these Web sites.

Metro does not endorse any opinion, report, product or service described in them and is not responsible for the accuracy, completeness or reliability of their content or information. Any use thereof is solely at the user's own risk.

Leveraged Lease Program

Metro has entered into various leveraged lease obligations to lease heavy rail vehicles, light rail vehicles, real property operating facilities and transit buses to various investors and simultaneously entered into sublease agreements to lease them back. Metro received lease proceeds from the investors which were used to purchase investments that will be used to fund all future sublease rent payments. Amounts remaining above the costs of the investments represent Metro's benefit from the leases and either have been or will be used by Metro to finance various capital projects.

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