Economics
California Toll Road Risks Biggest Default Since Detroit
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California’s largest toll-road agency, whose revenue has trailed projections for six years, is nearing the biggest default in the $3.7 trillion municipal market since Detroit’s record bankruptcy.
The Foothill-Eastern Transportation Corridor Agency, which operates 39 miles (63 kilometers) of toll highways in Orange County, risks default on $2.4 billion in debt, a consultant to California Treasurer Bill Lockyer’s Debt and Investment Advisory Commission said in July. The county itself filed for protection in 1994, the biggest U.S. municipal bankruptcy at the time, after losing about $1.7 billion on derivatives.