Fitch Drops Toll Road Agency

Fitch Ratings has downgraded its underlying rating for the Foothill/Eastern Transportation Corridor Agency’s toll revenue bonds to BBB-minus from BBB.

The May 14 action affects about $2.3 billion in outstanding debt from the agency, which operates a 36-mile toll road network in Orange County.

“The downgrade reflects the near to medium-term economic challenges facing the F/ETCA’s service area, the resulting declines in traffic and the relative degradation in credit quality of the project,” Fitch said in its news release, noting that the toll road’s traffic base has diminished to 2004 levels.

The recession and real estate bust have hammered the toll system’s primary traffic base linking inland bedroom communities to coastal job centers.

Foothill/Eastern was built in the 1990s, at the same time as a sister project, the San Joaquin Hills tollway. The two are physically unconnected and legally distinct, but operated by one management team.

The Foothill/Eastern has been the better performing of the two. Fitch rates the San Joaquin Hills Transportation Corridor Agency a speculative BB, and revised its outlook to negative last week.

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Transportation industry
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