Standard and Poor's restores OCTA credit rating.

ORANGE, Calif.--(BUSINESS WIRE)--Feb. 17, 1995--Standard and Poor's Friday reaffirmed the Orange County Transportation Authority's (OCTA) credit ratings.

This makes OCTA the only local government to have its high-quality bond designations confirmed by two independent rating agencies.

A report announcing OCTA's credit outlook change was distributed by S&P Friday.

OCTA's bond issuances were placed on CreditWatch and with negative implications in December when the Orange County Investment Pool declared bankruptcy and all funds were frozen.

"The S&P decision is another vote of confidence in our financial picture and OCTA's ability to meet its obligations," said Chief Executive Officer Stan Oftelie. "On the heels of Moody's decision to confirm our credit ratings, this news is indeed positive."

Ratings are assigned by S&P and other agencies to grade bonds according to credit worthiness. Investors use the independent ratings to determine their selection of securities. The OCTA obligations and restored credit ratings are:

AA -- 1992 Measure M First Senior Bonds

A+ -- 1992 Measure M Second Senior Bonds

A+ -- 1994 Measure M Second Senior Bonds

The restored S&P credit ratings are positive news to Wall Street and investors because they represent another independent and objective assessment of credit risk. High-quality ratings also will allow OCTA to borrow funds at lower rates since investor generally find highly rated securities more attractive to select because of security.

The OCTA bonds should trade better in the secondary market, where those holding the initial issuances may sell to other investors more easily.

CreditWatch is assigned when events such as litigation, court rulings, significant changes in revenue or short-term borrowings develop. After such an event, a rating decision is usually made within 120 days after being placed on CreditWatch.

In other OCTA news, the Authority has reinstated $13 million in design contracts with private sector engineering firms for Measure M freeway projects. The contracts had been suspended in response to the county's declaration of bankruptcy.

"This keeps OCTA on schedule for Measure M freeway projects and puts 90 people back to work," said OCTA Chairman Charles V. Smith. "It is another great example of how this agency has responded to the bankruptcy by developing and implementing an effective action plan."

CONTACT: Orange County Transportation Authority, Orange

Elaine Beno, media relations manager, 714/560-5571