The U.S. Citizenship and Immigration Services has currently approved 600 regional centers, leading to a significant influx of U.S. investment immigration EB-5 projects into China, as many seek to capitalize on opportunities in China. The market for EB-5 projects is mixed, with some projects facing serious issues, resulting in many investors unable to recover their investments and even facing the risk of losing their green cards. Therefore, investors approach U.S. investment immigration EB-5 projects with extreme caution.
However, once the Pennsylvania Turnpike project was launched, it exhibited a rare phenomenon of "three quicks": quick decision-making on project selection, quick remittance of investment funds, and quick submission of applications. The Pennsylvania Turnpike project rapidly became the "standout" in the EB-5 market.
The reason the Pennsylvania Turnpike project stands out is due to its two major advantages: first, it is a project that has received actual approval from the U.S. Citizenship and Immigration Services under the I-924 pre-approval process as a 100% government project; second, the Pennsylvania Turnpike Commission, as the borrowing entity, has a long-standing A+ credit rating. Additionally, it is important to note that highway projects are considered stable income-generating projects.
As is well known, selecting a project is akin to selecting stocks; U.S. investment immigration EB-5 investors must consider industry development and the industry prosperity index. In the U.S. bond market, highway bonds have always been a favored choice for institutional investors seeking safe investments due to their stable traffic volume and income, which are not affected by economic indices, leading to very stable income expectations. Therefore, while highway projects may not be high-profit projects, they are certainly projects with stable income and strong income expectations, which is precisely what investors seek in EB-5 projects.
Investors choose to invest in EB-5 projects not to pursue high risks and high returns, but rather to achieve the best balance of low risk and stable returns, which is a characteristic of highway projects. The U.S. is known as the "country on wheels," and its culture is often referred to as car culture. Americans can forgo trains and buses, but they cannot live without their private cars. Thus, the operational status of highways in the U.S. is quite stable and continuously prosperous.
Generally speaking, the U.S. highway system is divided into two main categories: freeways and toll roads. The vast majority of highways are free, subsidized and maintained by the federal and state governments, while a few are toll roads, typically monopolized by the government or contracted to private enterprises for operation.
The Pennsylvania Turnpike Commission is one of the largest toll road management systems in the U.S., operating under the Pennsylvania state government. The Pennsylvania Turnpike Commission has a history of 77 years. According to the latest data from regional centers, the Pennsylvania Turnpike Commission currently generates toll revenues of $830 million annually, and it is expected that by 2020 (which is also when EB-5 project repayments are due), the annual toll revenue will reach approximately $1.3 billion, with a zero default rate to date.
For EB-5 investors, especially in government-monopolized highway projects like the Pennsylvania Turnpike project, the borrowing entity, the Pennsylvania Turnpike Commission, sets prices based on the construction and operational costs of the highway. Notably, the Pennsylvania Turnpike Commission has the authority to set its own prices, which gives it strong debt capacity and repayment ability, making losses unlikely.
Recent media reports indicate that the decline in gasoline prices in the U.S. has further stimulated automobile consumption, making U.S. highway stocks a "money-making" sector. The drop in gasoline prices is very favorable news for the U.S. highway industry, and it will also lead to long-term stable prosperity for the federal and Pennsylvania Turnpike Commission, making the Pennsylvania Turnpike project a hot project in the EB-5 market.
In summary, the Pennsylvania Turnpike project is not only a rare project that has received actual approval from the U.S. Citizenship and Immigration Services under the I-924 pre-approval process as a 100% government project, but it is also one of the few "state-owned" highway financing projects in the U.S. market in recent years. Therefore, it rightfully stands out as a "standout" in the U.S. investment immigration EB-5 market.
