Fitch Ratings on Monday placed the Santa Rosa Bay Bridge Authority’s BB-minus rating on negative watch, affecting about $116 million of outstanding revenue bonds. The action reflects recent year-over-year traffic declines that have grown larger since the implementation of a 17% toll increase in July 2007, resulting in a 10% decline in traffic and limited revenue growth, said a report by analyst Manutosh Mathur.
“To the extent traffic continues on its current pattern and management does not act to enhance revenue, the current profile is inconsistent with the BB-minus rating,” Mathur wrote. “Recent traffic declines may cause the reserve to be drawn down at a greater rate than was previously expected. Management’s willingness to raise tolls in the past is seen as a positive, but with decline in traffic and rapidly depleting debt service reserve funds, a plan to increase the toll beyond rate of inflation is needed.”