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Fitch Ratings Upgrades Foothill/Eastern Transportation Corridor Agency Toll Revenue Bonds

Rating agency cites solid financial profile, fiscal management and governance of the 133, 241 and 261 Toll Roads.

Irvine, Calif. - February 06, 2023

Fitch Ratings has upgraded the Foothill/Eastern Transportation Corridor Agency’s (F/ETCA) senior-lien and junior-lien bonds. The F/ETCA operates the 133, 241 and 261 Toll Roads.

Following are the F/ETCA’s current bond ratings:

  • S&P: A and A- respectively, with outlook stable
  • Moody’s: Baa2 with outlook positive
  • BBB+ and BBB respectively, with outlook positive

“The upgrade reflects (F/ETCA’s) prudent fiscal management and bond buybacks which has resulted in an improved debt profile coupled with a track record of continued strong traffic and revenue performance. The system has demonstrated strong traffic growth in six consecutive years leading up to the pandemic and has since shown a near full recovery, with revenues surpassing pre-pandemic levels,” stated Fitch Ratings in a release dated Jan. 26, 2023.

“Fitch Ratings’ decision to upgrade the bonds reflects the Agency’s financial strength and prudent fiscal planning that provide the stability needed to weather economic downturns and unforeseen events, such the pandemic, while also advancing important improvements to our roads,” said F/ETCA Chair and San Juan Capistrano City Council Member John Taylor.

“Every day, more people choose to drive The Toll Roads because of the predictable time savings and free-flow traffic conditions. This upgrade highlights the fiscal strength of the Agency. Fiscal prudence has been and remains the foundation for the Board’s approaches. It is important that the Agency continues its path of fiscal responsibility, while continuing to explore opportunities to strengthen its position,” said F/ETCA Vice Chair and Mission Viejo Mayor Pro Tem Trish Kelley.

“Strong fiscal management is core to the Agency’s past and future success,” said TCA CFO Amy Potter. “These decisions are driving the Agency’s mission to create opportunities to further reduce debt. Staff continues its commitment to working with our two Boards of Directors to focus on sound fiscal management and fulfilling the Agencies’ mission of providing congestion relief for the region.”

All bonds issued by the Transportation Corridor Agencies (TCA) are rated investment grade. The bonds were issued to fund construction of the 73, 133, 241 and 261 Toll Roads and are repaid using toll revenue. The Agencies have taken significant steps to manage debt by leveraging lower interest rates through bond refundings without extending maturity dates and considering plans for early paydown of the bonds prior to maturity as they become callable. In July 2022, F/ETCA used available cash reserves to pay down $125 million of bonds that would have matured in 2053, saving the Agency approximately $180 million in interest.

The F/ETCA and San Joaquin Hills Transportation Corridor Agency (SJHTCA), which comprise TCA, are two joint powers authorities created to plan, finance, construct and operate Orange County’s 51-mile toll road network – the 73, 133, 241 and 261 Toll Roads.

The upgrade by Fitch Ratings follows a recent rating upgrade for the SJHTCA bonds by Fitch in December 2022, as well as upgrades for the F/ETCA and SJHTCA bonds by S&P Global Ratings in February 2022 and November 2021, respectively.

In February 2022, S&P Global Ratings upgraded the F/ETCA senior-lien and junior-lien bonds to A and A-, respectively, with outlook stable. In November 2021, S&P Global Ratings has upgraded the SJHTCA senior-lien and junior-lien bonds to A and A- respectively, with outlook stable.

The Toll Roads have been providing a choice for drivers for nearly 25 years and the tolls collected are used to repay the debt incurred to construct the system and fund on-going operations and improvements.

The Toll Roads system, which represents 20% of Orange County’s highways, is the largest toll road network in California.

The Transportation Corridor Agencies (TCA) are two joint powers authorities formed by the California Legislature in 1986 to plan, finance, construct and operate Orange County’s public toll road system comprised of the 73, 133, 241 and 261 Toll Roads.