Fitch raters remain positive about Pennsylvania Turnpike despite big new Act 44 obligations

The Fitch bond rating company thinks that Pennsylvania Turnpike Commission (PTC) $1.7b of bonds (presently AA- with Stable Outlook) presently is likely to remain a strong investment despite the large extra borrowing and annual payments it is undertaking to the state DOT in return for a 50 year toll lease of I-80. The raters say that the Pike's new debt will be acquired gradually giving the opportunity to monitor its strength.

"PTC has maintained strong debt service coverage above 2.4 times (x) since 2001 and solid unrestricted cash balances. While coverage levels have been strong, Fitch expects debt service coverage levels to fall as the PTC manages both existing obligations on the mainline facilities and capital projects contained in its 10-year capital program but also new obligations under Act 44."

Fitch raters like the 25% increase in tolls authorized by legislation for 2009 and the 3% increases annually but say the Turnpike's detailed financial plan is not available so their judgement is reserved. They are also reassured that the Turnpike has much reduced obligations to Penn DOT if opponents in the state or US government's block I-80 tolling.

TOLLROADSnews 2007-09-12