The Dulles Greenway's holding company Toll Roads Investors Partnership II (TRIP2) $-billion of outstanding bonds have been downrated by Fitch from BBB- to BB+, reflecting what the rating firm says is high leverage, expected thin coverage of debt service and dependence for liquidity on increases in tolls beyond already high levels.
Moody's is lowering the rating on senior revenue bonds from Aa3 to A1, citing ballooning debt being incurred to subsidize transit and free roads in the state along with traffic and revenue "underperformance" despite higher than assumed toll increases. The Turnpike is required by a state law (Act 44) it proposed in 2007 to head off privatization to contribute $450m/year in grants to lossmaking transit and untolled roads.
Lower than expected net revenues at the Miami Dade Expressway Authority and reduced financial flexibility is cited by Fitch Rating as their rationale for a slight downrating in the south Florida toiler's outlook down from Positive to Stable. But the 'A-' rating for $1,067m of toll system bonds is maintained.
Fitch cites some difficulties in toll-by-plate as reducing debt service coverage ratios from an expected 1.41x to 1.3x this year and next.
Fitch Ratings see the 2012 outlook for tollroads (TRs) as basically stable with a few negative. Traffic on TRs rated by Fitch has not been as weak as national vehicle miles traveled - in slight decline since March 2011. They say traffic volumes will remain "pressured" through 2012 due to the weak economy.
Fitch Ratings have assigned an 'A' rating to $275m of new bonds being used for refinancing as well as the $7.72b in outstanding revenue bonds. And its outlook is 'stable' they say. Moody's are much less positive.
Drops in traffic have led Standard & Poor's to downrate the debt of the Blue Water Bridge Canada, the Canadian government owned portion of the Michigan-Ontario bridge north of Detroit. The debt is now 'A-' vs 'A' before.
Fitch Rating has reaffirmed the existing 'AA-' on $1,034m of Oklahoma Turnpike Authority bonds being refunded. The raters say toller's outlook is "stable."
They report that Credit strengths include:
- a mature and stable traffic profile, supported by significant rate-making flexibility and competitive toll rate structure
- availability of fuel taxes as a last resort to pay debt service
- lack of competing free roads for long-distance travel
Fitch are rating North Carolina Turnpike Authority's Triangle Expressway bonds 'BBB-'. They include:
- $211m of Triangle Expressway (TE) current interest revenue bonds
- $84m of TE capital appreciation bonds
- $400m of TIFIA debt
Fitch Ratings have put Massachusetts Turnpike Authority's metro highway bonds on a "Rating Watch Negative" and made blistering remarks following the Authority's Monday wimp-out from an announced toll increase March 29.
Fitch Ratings after a review of the New Jersey Turnpike have reaffirmed the 'A' rating for the big toller's revenue bonds, and say its overall outlook rating is Stable, a change from the Negative outlook they had before the recent toll increase.