LOS ANGELES — Senior-lien toll road bonds issued by the Orange County Transportation Authority, Calif., received a two-notch upgrade to AA-minus from Standard & Poor's on Tuesday.

After upgrading the rating from A, S&P also gave the bonds a stable outlook.

OCTA had $160 million in outstanding debt as of year-end 2012, according to financial documents posted on the Municipal Securities Rulemaking Board's EMMA website. The authority refunded its $124 million in senior lien toll road bonds on Aug. 8, 2013.

The upgrade reflects "our view of OCTA's completion of the additional capacity in the corridor combined with the solid historical and projected debt service coverage and very strong unrestricted cash balance," according to the S&P report.

S&P analysts cited an expectation that the region's fundamental economic and demographic trends will continue to support growth for the upgrade, and that traffic and revenue performance will meet or exceed projected levels.
The availability of high-paying jobs in Orange County combined with the more reasonably priced homes available in Riverside and San Bernardino counties has kept traffic to the managed-lane toll road robust.

Moody's Investors Service and Fitch Ratings rate OCTA's 91 Express Lane bonds at A1 and A-minus.

The 91 Express Lanes is a four-lane, 10-mile toll road built in the median of California's Riverside Freeway, State Route 91, between the Orange/Riverside County line and the Costa Mesa Freeway, SR 55. It is one of the few managed lanes in the country to achieve the AA rating.

It is the only managed-lane project that Moody's rates.

"It was the first privately financed toll road built in the U.S. in more than 50 years, the world's first fully automated toll facility, and the first application of value pricing in the U.S.," according to the S&P report.

OCTA began operating the toll road on Jan. 3, 2003 after a bond-financed buyout of the private concessionaire that originally built the lanes.

A 2008 state law extended the OCTA's authority to collect tolls on the lanes to 2065 from 2030.

Cofiroute USA LLC, an experienced toll road operator, continues to operate the road.

With the conclusion of a program to expand capacity in the free lanes and the continued strength in the demand for the express lanes, S&P analysts said they "believe that the road has now cleared one of the credit risks we noted in the past and demonstrated the strength of the road."

S&P analysts said they are anticipating future growth in vehicle traffic based on historical traffic demand and continued demographic trends. Annual traffic volume in the corridor grew to 12.1 million vehicles in fiscal 2013 from 5.5 million in 1996, according to the S&P report. The peak year for annual traffic volume was 2007, at 14.6 million.

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