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SAN JOAQUIN HILLS TRANSPORTATION CORRIDOR AGENCY (CALIF.) SENIOR BONDS RATED 'BBB' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Feb. 23 /PRNewswire/ -- The San Joaquin Transportation Corridor's (SJHTCA) $1.020 billion Senior Lien Revenue Bonds are rated BBB' by Fitch. These bonds are being issued in conjunction with $101 million Junior Lien Revenue Bonds which are not rated by Fitch. The credit trend is stable. Both senior lien and junior lien bond proceeds will be used to finance the property acquisition, design, and construction of the SJHTCA's 14.5 mile limited access toll road project which will connect the Corona del Mar Freeway (State Route 73) near the John Wayne Airport at the northern terminus with I-5 near Avery Parkway at the southern terminus, running approximately parallel to the Pacific coast. Both bond issues are expected to be sold through negotiation during the week of March 1 by a syndicate led by The First Boston Corp.
 The SJHTCA toll road project will be the first public toll road built in California. The construction risks inherent in a project of this scope are considerable. However, the design/build contract with its liquidated damages provisions and its attendant builder's risk insurance policy should adequately contain costs and assure timely opening of the project. Also, an additional $100 million project contingency fund will be capitalized from bond proceeds to address any variances from the contract or delays due to certain uncovered force majeure risks. Likewise, interest is capitalized for two years beyond the scheduled opening of the toll road for any building delays that aren't covered by the contract, such as those resulting from environmental litigation. These capitalized interest and contingency fund monies can also be used for any revenue shortfalls that could occur during the initial ramp-up period. The SJHTCA currently holds all environmental permits necessary to build the project. Furthermore, the SJHTCA has a well experienced management staff who has assembled an exceptionally strong project team to construct the toll road.
 The rating is based on the perceived strong demand for a thoroughfare to service the San Joaquin Hills corridor to relieve the extreme vehicular congestion which currently exists in southern Orange County, to serve as a direct route from the residential areas at the proposed toll road's southern end to the Irvine business district at its northern end, and to accommodate future development. The projected levels of traffic for the toll road after its opening constitute only about a 13 percent market share of the southern county's vehicular traffic demand, decreasing slightly in later years. The project's economic feasibility is further supported by the forecast traffic levels and resultant projected net toll revenues' demonstrated ability to withstand rigorous stress tests and still adequately cover debt service when due. In addition, financial support has been extended to the project from the federal, state and county levels of government demonstrating their commitment to the project's success.
 Counterbalancing these positive credit factors are several contrary circumstances, including ongoing environmental litigation as well as the potential for additional litigation and potential changes in law, most notably those concerning air quality and environmental issues. These concerns could hinder adherence to the construction schedule as well as produce lower-than-expected traffic levels. Likewise, the initial toll rate will be among the highest currently charged in the U.S., although Orange County's high wealth indicators should help to ameliorate this concern. Depending on a ruling by the Internal Revenue Service concerning the issue of taxability of the project's federal letter of credit assistance, this extra level of protection may not be available to augment pledged revenues for payment of these tax exempt bonds. The first five years of the project's operation, when the federal letter of credit would be available, show projected debt service coverage at its lowest levels, as is typical of most "start-up" toll roads. Finally, the possibility of the construction of competing roads and/or other transportation modes also exists.
 -0- 2/23/93
 /CONTACT: Andrea R. Bozzo, 212-908-0515, or Amy S. Doppelt, 212-908-0514, or Alan Spen, 212-908-0954, all of Fitch/


CO: San Joaquin Transportation Corridor Agency ST: California IN: SU: RTG

WB -- NY045 -- 9386 02/23/93 11:49 EST
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Date:Feb 23, 1993
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