The serial bonds are subject to redemption at par in whole or in part, at the option of the Authority on any
July 1 after June 30, 1983 by operation of the Sinking Fund; or at redemption prices ranging from 102% to
100% of the principal amount on any date or dates after July 2,1987 from any monies made available for such
purpose. The term bonds are subject to redemption by operation of the Sinking Fund in the years 1998 through
2015 at annual principal amounts ranging from $2,615,000 to $8,400,000.

In compliance with the Trust Agreement underlying the Transportation Facilities Projects Revenue Bonds,
First Series (Refunding), the Authority has established restricted equity accounts in the aggregate amount of
$53,973,093 for certain operating expenses, payment of the bonds and interest and acquisition, construction
and improvements to transportation facilities projects. Assets consisting of cash, $11,062,103; investments,
$44,748,807; and supplies inventories, $60,823; less current accounts payable, $1,898,640 have been restricted
for such purposes. Also see Note 12.A. Community Development Administration.

The Transportation Facilities Projects Revenue Bonds, First Series (Refunding) were issued by the Author-
ity on August 24, 1978 to refund all of the outstanding bonds of the Authority (Refunded Bonds) in the
aggregate amount of $257,391,931 including accrued interest. The net proceeds of the Refunding Bonds,
together with monies deposited by the Authority with the Trustee, totaling $221,175,796, were used to acquire
direct obligations of the U.S. Government. The principal of and the interest on the U.S. Government obliga-
tions when due will provide monies sufficient to pay (i) the redemption prices of the Refunded Bonds called
prior to their respective maturities, (ii) the principal of the Refunded Bonds becoming due at their respective
maturities, and (iii) the interest to become due on the Refunded Bonds on and prior to their respective
redemption or maturity dates. In the opinion of counsel, this refunding transaction constituted a defeasance of
the Refunded Bonds and, accordingly, the Refunded Bonds are not reported in the financial statements of the
Authority and the Authority recognized an extraordinary gain of $36,216,135.

On September 11,1979, the Maryland Transportation Authority adopted a resolution directing the transfer
of $13,000,000 from the Transportation Authority Fund to the Transportation Trust Fund of the Department
of Transportation of Maryland. The transfer will be made on a monthly basis as the funds become available.

Community Development Administration:

The Community Development Administration has issued revenue bonds, the proceeds of which were used to
provide funds for its various mortgage loan programs. The revenues and assets of each mortgage loan program
are pledged as collateral for the respective revenue bonds. Interest rates range from 3.75% to 7.25% and the
bonds mature serially through January 1, 2020. The aggregate principal amount outstanding at June 30,1979
was $202,234,000. Maturities of principal (amounts expressed in thousands) are as follows:

Years ending
June 30,	Amount
1980	$ 1,125
1981	1,690
1982	1,990
1983	2,230
1984	2,385
1985 and thereafter	192,814
	$202,234

Substantially all bonds are subject to redemption provisions at the option of the Administration. Redemp-
tions are permitted at rates ranging from 103% to 100% of outstanding principal amount at dates between
January 1,1986 and December 31,1996. All unmatured bonds outstanding at December 31,1996 are redeem-
able at par.

At June 30, 1979 cash and short-term investments, in the amount of $40,052,000 representing unex-
pended revenue bond proceeds, are reported as restricted assets.

In July and November 1979, the Administration issued $42,395,000 in revenue bonds, the proceeds of
which are to be used to fund construction and permanent mortgage loans receivable. The interest rates on
these issues range from 5.2% to 8.25% and the bonds mature serially from January 1,1981 to January 1, 2022.

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