Fitch Ratings Affirms Illinois Tollway Revenue Bonds at 'AA-'.

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 9, 2003

Fitch Ratings affirms the long-term credit rating on the Illinois State Toll Highway Authority's outstanding priority revenue bonds, 1992 series A and refunding revenue bonds 1993, series A at 'AA-'. Fitch also affirms the long-term underlying rating on the authority's outstanding refunding revenue bonds 1993, series B, refunding revenue bonds 1996, series A, priority refunding bonds 1998, series A, and priority refunding bonds 1998, series B at 'AA-'. The 1993, series B, 1996, series A, 1998, series A, and 1998, series B bonds are rated 'AAA' based on guarantees of scheduled debt service payments under insurance policies with various corporations whose insurer financial strength are rated 'AAA' by Fitch Ratings. Fitch Ratings also affirms the 'F1+' short-term credit rating on the variable rate 1993, series B and 1998, series B bonds based on liquidity support in the form of letters of credit from Societe Generale and Landesbank Hessen-Thuringen Girozentrale, respectively.

The 'AA-' rating reflects the very strong economic fundamentals of the network of roads operated by the Illinois State Toll Highway Authority. Its mature, growing traffic base generates substantial amounts of cash flow with very low toll rates to cover operations, debt service and capital maintenance expenses. These underlying factors have generated debt service coverage levels in the 3.0 times (x) range and combined with strong internal liquidity levels and relatively low debt levels provide the framework for a very high investment grade credit.

Nevertheless, an increasing long-term risk to the authority's credit profile is the political impasse with respect to the system's significant capital reinvestment needs. Such reinvestments are needed in order to maintain the system's future revenue generating capability. Deteriorating roadway serviceability scores, as highlighted in the authority's independent engineers report, could challenge future revenue generation, and are unusual for an entity with such a high debt rating. The deferral of major capital improvements creates a concern for the management of future expenditure and debt levels. While the authority is in an excellent financial position with which to embark upon a capital reinvestment phase for its mature facilities, the outcome of future reviews could well hinge on its ability to implement such a plan. While the current rating level anticipates the need for additional debt issuance, toll rate increases and lower debt service coverage from recent levels, it does not anticipate the continued absence of long-term capital reinvestment.

The Illinois State Toll Highway Authority operates the Tri-State, Northwest, East-West and North-South tollways in the Chicago metropolitan area. It consists of 273.4 miles of limited access highway in Northern Illinois. It began operations in 1958 and has grown to serve the fastest growing areas in the state. The authority is governed by an 11-member board of directors that includes the governor and the secretary of transportation of the state, with the remaining directors subject to appointment by the governor for four-year terms, with the advice and consent of the state senate. No more than five directors may be from the same political party.