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HOUSTON BRIDGE $90 MILLION SENIOR LIEN BONDS RATED 'BBB-' BY FITCH -- FITCH FINANCIAL WIRE --

HOUSTON BRIDGE $90 MILLION SENIOR LIEN BONDS RATED 'BBB-' BY FITCH
 -- FITCH FINANCIAL WIRE --
 NEW YORK, April 21 /PRNewswire/ -- The Texas Turnpike Authority's Houston Ship Channel Bridge (HSCB) $90 million senior lien revenue refunding bonds are rated 'BBB-' by Fitch. The credit trend is stable. These bonds are being issued in conjunction with $85 million current interest junior lien bonds and $37 million capital appreciation junior lien bonds. Fitch has not been requested to rate the junior lien bonds. The bonds are expected to be sold through negotiation during the week of April 27.
 The rating is based on the fundamental change in the HSCB's competitive position since the completion of sections of the frontage roads (Beltway 8) from 1987 to 1990. Of tantamount importance to the rating is the senior lien/junior lien structure of the refinancing plan, which serves to insulate the senior lien bonds from the risk that traffic usage of the bridge has been overestimated again. The senior lien bonds were sized and structured so that estimated 1992 net revenues ($9.8 million) produce debt service coverage of maximum annual debt service on the senior lien bonds of 1.25 times. There are no cross default provisions tieing the senior lien bonds to the junior lien bonds.
 Counterbalancing these positive credit factors are the HSCB's historically lower than estimated usage performance since its opening in May 1982. This is due primarily to the Texas Department of Transportation's (DOT) changes in scheduling plans for the completion of the frontage roads and a historical initial resistance to tolls by the residents of the Houston area. Unsatisfactory performance also surrounds the financing history of the HSCB in that this refinancing plan is the second restructuring of the bridge's debt designed to avert default. Important interchanges which will directly connect Beltway 8 (frontage road to the HSCB) to Interstate I-10 and I-45 are being built by Texas DOT. Scheduled completion dates for these interchanges provided by Texas DOT are assumed in the toll and revenue projections for this refinancing and are subject to change. Likewise, the timing and the competitive effect of the under-construction six-lane Baytown Bridge are additional unknowns at this time. While not likely near- term, the possibility exists that other competitive crossings will be built across the Ship Channel.
 Although the HSCB increased its market share of the traffic crossing the Ship Channel from 4.6 percent in 1983, its first full year of operations, to 11.0 percent in 1990, the combined effects of a 20 percent toll increase in November 1990 and the current national recession caused passenger car traffic to decrease by 11.9 percent from November 1990 to October 1991, and commercial traffic to decrease by 20.6 percent during the same period. However, the effects of toll increases on traffic generally end after about one year and slight signs of a lessening impact from the recession are evident. These events are borne out in the toll transaction results for three of the four ensuing months: November 1991 (+2.9 percent), December 1991 (-1.2 percent), January 1992 (+5.1 percent) and February (+7.8 percent).
 -0- 4/21/91
 /CONTACT: Andrea R. Bozzo, 212-908-0515 or Susan M. Courtney 212-908-0503, both of Fitch/ CO: Texas Turnpike Authority ST: Texas IN: TRN SU: RTG


SM -- NY104 -- 0886 04/21/92 16:46 EDT
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Publication:PR Newswire
Date:Apr 21, 1992
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