Just a month before the next bond payment is due on the Garcon Point toll bridge in north Florida, Fitch Ratings has affirmed its D rating on the Santa Rosa Bay Bridge Authority’s $116.8 million of outstanding revenue bonds.
The authority sold $75.5 million of current-interest bonds and $19.4 million of capital appreciation bonds in 1996 to build the toll bridge.
Fitch downgraded the bonds to D when the authority defaulted on its July 1, 2011, payment. The authority also defaulted on its payment in January.
“Due to the authority’s extremely constrained financial profile, stemming from continued poor traffic and revenue performance, cash flow from operations has been insufficient to make debt service payments, requiring the authority to repeatedly draw on the debt service reserve fund,” wrote Fitch analyst Tanya Langman.
The debt service reserve fund was exhausted in March when the trustee made a partial interest payment.
“The trustee has reported that various potential alternatives are being explored,” Langman said. “Absent a possible restructuring, the authority’s gross revenues are expected to remain insufficient to make the scheduled debt service payments and the default situation would remain uncured as the debt service requirements increase.”
Traffic on the bridge has never met forecasted projections, and there are two free alternative routes.
The trustee has hired FTI Consulting Inc. as financial advisor to assist with restructuring options, though none have been proposed yet.
The bonds are rated D by Standard & Poor’s and Ca by Moody’s Investors Service.
