To ease some of its $3 billion debt, Amtrak received permission from the U.S. Department of Transportation to use a large part of its Pennsylvania Station as collateral for a $300 million loan.
This is the first time it has sought a loan to cover operating expenses. Amtrak received $521 million from Congress for both operations and capital expenses for this fiscal year and needs the additional $300 million to bring it to October 1, when the next fiscal year begins.
A "facilitator," a bank or group of banks, is arranging a consortium of lenders to provide the loan, according to the Washington Post. After that, the White House and DOT would have to make a final decision on whether to release a federal lien on the property to enable Amtrak to secure the loan.
The mortgage would be limited to concourses A and B, Amtrak's areas in the station, according to Amtrak. Track and platform areas would not be affected. Neither would areas used by the Long Island Rail Road and New Jersey Transit.
While Amtrak's revenue grew 7% in the first six months of the fiscal year to $1.05 billion, its expenses rose 8% to $1.32 billion, reported the Post. Amtrak estimates it needs a minimum of $1.5 billion a year for capital expenses alone, nearly three times its current appropriations.