Fitch Ratings Affirms TCA's $1.9B Foothill/Eastern Toll Road System Bonds.

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 8, 2003

Fitch Ratings affirms the underlying credit rating on the outstanding Foothill/Eastern Transportation Corridor Agency, California, toll road refunding revenue bonds, series 1999 at 'BBB'. In addition, Fitch Ratings affirms the credit rating on the outstanding senior lien toll road revenue bonds, series 1995A at 'BBB'. These two issues comprise approximately $1.9 billion in outstanding revenue bonds. The series 1999 current interest bonds maturing in the years 2007-2009, 2011-2016 and 2019, and the 1999 capital appreciation bonds maturing in the years 2017-2019 are rated 'AAA' based on a guarantee of scheduled debt service payments under an insurance policy with MBIA Insurance Corporation, whose insurer financial strength is rated 'AAA' by Fitch Ratings. The Foothill/Eastern toll road system is one of two projects managed by the Transportation Corridor Agencies (TCA) of Orange County, California; the other project is the San Joaquin Hills toll road.

The 'BBB' long-term rating reflects the attainment and maintenance of a relatively stable share of traffic by the Foothill/Eastern toll road, its marginally elevated revenue performance and the ability of the toll road to now sustain moderate shocks from reduced economic activity, external events and increased operating costs. The availability of a federal line of credit through 2009 to pay debt service in the event of net revenue shortfalls, provides added protection. This rating balances these positive aspects with the high, growing debt load of the project and the need for periodic toll rate increases to keep pace with a growing annual debt service burden that will keep the facility towards the top of it's toll elasticity curve for much of the life of the project. As a result, the credit remains vulnerable to prolonged adverse developments. These factors limit the ability of this credit to assume significant amounts of additional senior and subordinate debt in connection with the construction of the planned Foothill/South extension of the toll road. However, the Transportation Corridor Agencies, which manages the toll road, is pursuing a consolidation with its sister agency, the San Joaquin Hills Transportation Corridor Agency that could offer a potential solution to financing the extension. Were the consolidation to go through, it would incorporate the refunding of the current debt.

The Foothill/Eastern Transportation Corridor Agency is a joint powers authority comprising of thirteen cities in Orange County. The Foothill/Eastern toll road is a limited-access, 36-mile, four to six-lane, toll road beginning at State Route 91 near the Riverside County line to the north, and providing south-west connections to Interstate 5, the major north-south highway corridor in the region. The 15.1-mile Foothill/South extension to the project is designed to provide a highway alternative to I-5 in Orange County all the way down to the San Diego County border.