Fitch Ratings said it has downgraded the ratings for the following stand-alone grant anticipation revenue vehicle (GARVEE) bonds, as follows: Alaska Railroad Corp. to BBB from A; Chicago Transit Authority to BBB from A; Georgia State Road & Tollway Authority to A-plus from AA-minus; Kentucky Asset Liability Commission to A-plus from AA-minus; Maine Municipal Bond Bank to A-plus from AA-minus; New Jersey Transit Corp. to BBB from A; Oklahoma Department of Transportation to A-plus from AA-minus; Rhode Island Economic Development Corp. to A-plus from AA-minus; California to to A-plus from AA-minus; North Carolina to A-plus from AA-minus; and Ohio to A-plus from AA-minus.
In addition, Fitch has upgraded Michigan's GARVEE bonds to A-plus from A and affirmed the A-plus rating on the Idaho Housing and Finance Association's outstanding GARVEE bonds.
The outlook on all bonds above has been revised to stable from negative.
Fitch's assessment of the strength of the federal program has been revised to midrange from strong, a direct result of the increased uncertainty around Federal Policy. As this attribute is a key driver for GARVEE bond ratings, it is the agency's view that the increased uncertainty is not consistent with ratings in the AA category.
Fitch has downgraded the bonds with strong structural protections to A-plus, a rating that balances the increased uncertainty around federal policy with debt service coverage ratios that provide ample protection to a declining revenue stream. The structural protections included in three of the transit GARVEE bond programs that Fitch rates are viewed as weaker given their more limited downside protection to declining revenues and as a result the ratings have been downgraded to BBB.