WASHINGTON — The outlook for U.S. toll roads is negative for the fifth consecutive year, according to a Moody's Investors Service analysis of expectations for the sector over the next 12-18 months.

Despite "stabilizing traffic trends" that many industry analysts have observed and predicted as the country fights its way back from the Great Recession, the Moody's concludes in a report issued Wednesday that the sector does not warrant a move to a stable outlook.

"Negative credit factors continue to outweigh positive ones, which need to show greater sustainability," said Moody's Senior Vice President Maria Matesanz, author of the report.

"These pressures include a continued weak pace of economic recovery and the potential fiscal tightening in the U.S. which could drive the economy back into recession in 2013 and negatively affect toll road traffic and revenue," the report states. "An organized, long-term solution to the fiscal cliff could stabilize the economy and sustain traffic trends, which are flat but no longer declining, and lead us to change this sector outlook to stable."

Toll roads are gaining increasing acceptance nationwide as state transportation leaders seek ways to fund road construction and maintenance amidst falling gas tax revenues and uncertain federal policy. The International Bridge, Tunnel, and Turnpike Association is running a concerted effort to win public opinion over to tolls, and states like Connecticut are showing willingness to consider new tolling legislation.

However, the Virginia State House and Senate on Tuesday approved legislation would ban tolling on I-95.

While Moody's does not expect federal action or inaction on the fiscal cliff to directly affect toll roads, the report does warn that cutbacks in loan programs such as the Transportation Infrastructure Finance and Innovation Act, or TIFIA program, could lead to more borrowing for toll roads.

Currently, the rating agency expects toll road volume to grow in line with GDP: between 1.5% and 2.5%.

Toll roads also face a risk associated with increased leverage, Moody's analysts wrote.

"We expect rising leverage to continue as toll roads fund large debt-financed capital projects and support increased transfers to state and local governments to bridge infrastructure funding gaps," the rating agency said. "As governments struggle with their own financial difficulties, many are increasingly eyeing their critical infrastructure assets, especially toll roads, as an attractive source of additional revenue."

A major stabilization of the U.S. economy could lead to increased toll road traffic and a change in Moody's view of the sector.

"An organized, long-term solution to the fiscal cliff could stabilize the economy and sustain traffic trends, which are flat but no longer declining, and lead us to change this sector outlook to stable," the report concludes.

The agency plans to revisit the sector outlook midyear.

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