Fitch Ratings affirmed its AA-minus rating on the Bay Area Toll Authority’s senior toll bridge revenue bonds in a report Wednesday on the $305 million of BATA debt set to be reoffered next month, as the authority attempts to rework its variable-rate exposure.
The rating agency said the authority expects to reoffer the bonds on Sept. 4 as $150 million of term-rate bonds and $155 million of index-rate bonds.
When that happens, Fitch said it will withdraw its enhanced rating on the bonds.
The reoffering will change four series of debt out of variable-rate demand bonds, and remove direct-pay letters of credit.
Fitch said the move reduces BATA’s bank exposure in its $1.5 billion variable- rate portfolio by 21%.
Fitch has a stable outlook on BATA’s $5.56 billion of outstanding senior toll bridge revenue bonds.
“The economic strength and near monopoly position provide management the ability to adjust rates to maintain a stable financial profile,” Fitch said in the report.
Fitch said the authority’s seven bridges have a resilient traffic base and its $6 peak hour toll is low to moderate compared to similar toll facilities, which leaves room for further increases if necessary.
Fitch noted that the toll authority’s management has a policy to maintain $1 billion in cash and investments, while senior debt service is expected to be covered by at least 1.8 times.
“However, total leverage including subordinate debt is moderate to high at 12 times net debt to cash available for debt service with increasing debt service obligations through 2030,” the rating agency said.
Fitch also said it expects the seismic retrofit of the San Francisco-Oakland Bay Bridge, which is set to open in September 2013, to be completed within current cost projections.