State Road 408, shown here, is part of the Orlando-Orange County Expressway Authority’s system in central Florida. Moody’s changed the agency’s credit outlook to stable from negative.

BRADENTON, Fla. - Moody's Investors Service revised the outlook on the Orlando-Orange County Expressway Authority, Fla.'s bonds to stable from negative as the quasi-state agency prepares to adopt a five-year work plan while facing potential governance changes.

Moody's affirmed its A2 rating on the $2.2 billion in outstanding OOCEA debt that it rates.

Returning the outlook to stable is largely due to changes in tolling structure that did not create a negative impact on traffic volumes, and a reduction in swap exposure, according to analyst Myra Shankin.

The stable outlook also includes Moody's expectation that traffic revenues will continue to provide strong financial margins and debt service coverage ratios while the authority retains adequate liquidity levels, despite a capital plan that requires significant borrowing through 2023, she said.

OOCEA Chairman Walter Ketcham said the change in Moody's outlook to stable "shows that our finances are in order and that we're making the right decisions for our future.

"An improved credit outlook saves toll payers and the community money. It also shows that the region's economy is strong and getting stronger," he added.

Moody's said the authority also faces challenges, including pending governance issues that could impact future capital plans and toll increases, and create instability that would put downward pressure on the rating.

Currently, OOCEA, which covers Orange County with five board members, is under investigation by the local prosecutor relating to the resignation of the executive director and hiring a replacement. The agency's network covers 109 miles of limited-access toll roads.

Moody's also noted that Florida Senate Bill 230 would fold OOCEA into the new Central Florida Expressway Authority responsible for toll road operations and construction in Orange, Seminole, Lake, and Osceola counties. The regional board would have nine members, including the mayors of Orlando and Orange County.

SB 230 passed the Senate March 26 and was sent to the House on April 1. The House has its own version of the new governance structure under consideration.

The OOCEA board has not opposed the change in governance, which would transfer all structures and debt to the larger agency. The proposed new law also contains non-impairment language to protect bondholders.

The long-term capital program by the OOCEA through 2023 totals $1.5 billion to be supported by $500 million of new senior lien debt and $200 million of loans from the federal Transportation Infrastructure Finance and Innovation Act program. The Expressway Authority has a five-year plan that guides shorter term projects, which is being updated.

The agency has a total of $2.6 billion of outstanding of bonds rated A by Fitch Ratings and Standard & Poor's. Both maintain stable outlooks.

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