This is an update of a prior analysis of WIFIA’s loan portfolio, summarized in a May 2021 post, The Economic Cost of WIFIA’s Portfolio. The update is as of federal FYE September 30, 2021 and includes a new analysis indicating that the program’s large interest rate re-estimate losses are due a loophole in federal FCRA budgeting methodology. The loophole creates incentives to offer free interest rate options, the cost of which doesn’t require upfront discretionary appropriations but may result in large future mandatory appropriations. The use of the loophole (likely unintentional) enabled WIFIA loans to successfully compete with tax-exempt bonds.

The presentation can be downloaded here or viewed below.