Fitch Rates Bay Area Toll Auth $1.16B 2006 Series F Revs 'AA-'; Stable Outlook.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. assigns an 'AA-' long-term rating on the $1.161 billion Bay Area Toll Authority The Bay Area Toll Authority (BATA) was created by the California State Legislature in 1997 to administer the base $1 auto toll on the San Francisco Bay Area's seven state-owned toll bridges. , CA (BATA, or the authority) San Francisco Bay Area “Bay Area” redirects here. For other uses, see Bay Area (disambiguation). The San Francisco Bay Area, colloquially known as the Bay Area or The Bay Toll Bridge revenue bonds 2006 series F. In addition, Fitch affirms the 'AA-' rating on $100 million in series 2001 parity revenue bonds and also affirms the 'AA-' underlying rating on the authority's outstanding $1.9 billion variable rate demand and auction rate parity revenue bond debt which has an insured rating of 'AAA' based on a guarantee of scheduled debt service payments under a financial guaranty insurance policy provided by Ambac Assurance Corporation Ambac Assurance Corporation A subsidiary of publicly traded Ambac Financial Group that provides financial guarantees for municipal borrowers and for asset-backed and structured issues. , an XL Capital, each with claims-paying ability rated 'AAA' by Fitch Ratings. The authority's Rating Outlook is Stable. The authority's outstanding variable rate demand bonds carry an 'F1+' short-term rating based on liquidity support from a number of banks in the form of standby bond purchase agreements. The Series 2006 F bonds are expected to be sold through negotiation via a syndicate led by Citigroup Global Markets during the week of April 3rd. Bond proceeds will be used to defease $1.1 billion in outstanding bonds issued by the California Infrastructure and Economic Development Bank (I-Bank) on behalf of the California Department of Transportation The California Department of Transportation (Caltrans) is a government agency in the U.S. state of California. Its mission is to improve mobility across the state. It manages the state highway system and is actively involved with public transportation systems in California. (Caltrans) for the Seismic Retrofit Program (SRP SRP - A data link layer protocol. ) and also to reimburse BATA for the cost of refunding approximately $80 million in subordinate lien commercial paper also issued by the I-Bank on behalf of Caltrans. Proceeds will also be used to meet the debt service reserve fund requirement, and pay costs of issuance. The 'AA-' rating reflects the economic strength and near monopoly position of the seven bridge system which provides critical transportation links in the San Francisco Bay Area, a mature and relatively stable traffic base, improved legal ratemaking rate·mak·ing n. The practice of establishing rates of payment, as for public transportation or utilities. rate flexibility, and demonstrated low to moderate elasticity of demand Elasticity of demand The degree of buyers' responsiveness to price changes. Elasticity is measured as the percent change in quantity divided by the percent change in price. A large value (greater than 1) of elasticity indicates sensitivity of demand to price, e.g. . The rating also incorporates BATA's strong debt service coverage, substantial liquidity position, and the ability of this system of bridges to sustain the loss of one or more of its assets from catastrophic seismic activity. The rating also reflects continued construction risk for the Seismic Retrofit Program (SRP) and Regional Measure One (RM1) programs though significant program contingency allowances on the SRP provide a considerable cushion. In addition, the rating incorporates the possibilities of further leveraging of toll revenue beyond the approximately $2.7 billion in new money issuance expected through 2011, expense growth of newly acquired operations and maintenance and rehabilitation responsibilities exceeding forecast, and potential additional SRP program costs associated with the Antioch and Dumbarton bridges. Despite the dramatic cost increases of the seismic program, the critical nature of this seven-bridge system and long-term economic strength and viability of the San Francisco Bay Area continues to provide a basis for very strong investment grade credit quality. BATA manages seven of the eight major crossings in the Bay Area -- the eighth being the Golden Gate Bridge Golden Gate Bridge, across the Golden Gate from San Francisco to Marin Co., W Calif.; built 1933–37. Its overall length is 9,266 ft (2,824 m); its main span across the strait, 4,200 ft (1,280 m), is one of the longest bridges in the world. Joseph B. -- which is managed by a separate entity. These bridges provide the only viable vehicular links within the Bay Area. Given the limited ability of rail and ferry systems to serve the diverse destinations within the area, these facilities are essential to sustained economic success. These fundamentals, together with the continued retention of economic rate-setting flexibility to deal with unexpected events that materially impact financial performance, make for very strong credit quality. Seismic activity remains a key risk, particularly now with the expected 2013 completion of the east span of the San Francisco Oakland Bay Bridge. Coverage of debt service as calculated by Fitch, which incorporates all maintenance expenses, is expected to be in excess of 2 times(x) for fiscal years 2006-2011. However, pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma coverage quickly drops to a medium-term level of 1.68 times. Debt service coverage will be low for an 'AA-' rated facility. However, the economic strength and monopoly position, strong projected cash balances and management's proactive stance at solving problems largely mitigates this risk. BATA is expected to issue approximately $2.7 billion in additional parity debt by 2011 to cover capital costs associated with the three programs, approximately 74% of which is likely to be issued by 2009. At that point in time, BATA estimates that approximately 22% of total debt will be traditional fixed-rate, 64% will be synthetically fixed, and 14% will be pure variable rate debt. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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