NEW JERSEY TURNPIKE $1.6 BILLION REVENUE BONDS RATED 'A' BY FITCH -- FITCH FINANCIAL WIRE --
NEW JERSEY TURNPIKE $1.6 BILLION REVENUE BONDS RATED 'A' BY FITCH
-- FITCH FINANCIAL WIRE --
NEW YORK, Nov. 15 /PRNewswire/ -- The New Jersey Turnpike Authority's $1.3 billion turnpike revenue refunding bonds Series 1991 C are rated 'A' and $300 million Series 1991 D are rated 'A/F-1+' by Fitch. The 'A' rating is affirmed on $503 million outstanding Series 1991 A and Series 1991 B bonds. The credit trend is stable. The Series D short term rating pertains to the liquidity facility provided by Swiss Bank Corp.
The foundation for the rating is the New Jersey Turnpike's critical location as a link in the major Northeast transportation corridor and a primary roadway in the greater New York metropolitan area. Although traffic growth has slowed recently due to the national and regional recessions, the turnpike's strong operating history has continually demonstrated its inherent resiliency in such cyclical dislocations. The 1991 financing plan is well conceived and successfully serves the two politically divergent goals of lending financial support to state government while preserving the authority's financial viability to maintain and improve its investment in the turnpike.
The New Jersey Turnpike Authority has responded to the state legislature's mandate to buy a 4.4 mile segment of I-95 from the state with considerable re-evaluation and revision to its day-to-day operations and to its capital planning process. In addition to its critical location, there are few alternative limited access options to the turnpike. These factors have resulted in a highly in elastic traffic demand which, in turn, has produced consistently strong historical operations. Despite the recent large toll increase, current rates are competitive with other comparable turnpikes and there remains sufficient leeway to raise them further when needed. Legal provisions in the new 1991 resolution provide a solid financial framework for bondholder protection as well as for the ongoing maintenance and operations of the turnpike.
Counterbalancing these solid credit fundamentals are the authority's currently high debt burden and significant projected additional capital needs. Furthermore, the authority's recent track record of capital planning has been deficient and costly with continual revisions necessary. Similarly, the authority's history of expense control has been insufficient. The governor's ability to veto toll increases further complicates timely implementation of such hikes.
/CONTACT: Andrea R. Bozzo of Fitch, 212-908-0515/ CO: New Jersey Turnpike Authority ST: New Jersey IN: TRN SU: RTG JT -- NY092 -- 1721 11/15/91 16:37 EST