Fitch Ratings assigns 'AA-' rating to West Virginia Parkways Authority's bonds.
New York: Fitch Ratings, a nationally recognized statistical rating organization (NRSRO) designated by the U.S. Securities and Exchange Commission, assigned a 'AA-' rating to the West Virginia Parkways Authority's (WVPA) $161 million series 2018 senior lien toll revenue bonds.
The authority's financial profile is expected to remain strong when factoring in approximately $390 million of additional bonds (including the upcoming series 2018 senior lien bonds) expected to be issued to fund mostly non-turnpike projects, with rating case coverage ratios averaging 3.0x and leverage evolving to 5.9x by 2020. The 'AA-' rating reflects WVPA's role as a key interstate corridor, with a demonstrated mature and stable traffic profile and significant legal rate-making flexibility. The rating is further supported by the authority's debt planning policy to maintain a minimum debt service coverage ratio (DSCR) of 2.0x and expected future pay-go funding of all capital and major maintenance needs. Credit considerations include exposure to commercial traffic volumes, limited local demand, some uncertainty with regard to future toll elasticity and moderate leverage.
The West Virginia Turnpike is an important interstate route linking eastern Ohio and western Pennsylvania in the north to western Kentucky, Virginia, North Carolina, and other states in the Southeast and Mid-Atlantic U.S. Local demand is limited, but the turnpike serves an essential route for commercial vehicles resulting in relatively high exposure, with approximately 50% of revenues derived from heavy trucks. Traffic has historically remained stable even through the most recent economic downturn, and demand has been relatively inelastic to a sizable toll increase in 2009. However, elasticity to the impending higher toll increase being implemented in 2019 is uncertain. The 2019 electronic toll rates will be $0.40 and $0.14 per mile for commercial and passenger vehicles respectively, which are approximately in the middle of the range when compared to other large toll-road systems but on the higher-end compared to most Fitch-rated turnpikes.
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|Publication:||Daily the Pak Banker (Lahore, Pakistan)|
|Date:||Oct 27, 2018|
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