Fitch assigns rating for financing of Maryland transit P3
Fitch Ratings has recently published that it has assigned rating for the financing of the Light Rail (Purple Line) P3 project in Maryland, USA, which will be financed by a low-interest federal (TIFIA) loan, tax-exempt private activity bonds (PABs) and the Maryland Department of Transportation's (MDOT) fixed annual payments.
Fitch Ratings has assigned an expected rating of 'BBB+(EXP)' to approximately US$323 million of senior Maryland Economic Development Corporation private activity bonds (PABs) issued on behalf of Purple Line Transit Partners LLC, a consortium composed of Meridiam, Fluor Enterprises and Star America, for the P3 project.
Fitch has also assigned an expected rating of 'BBB+(EXP)' to the approximately US$873 million subordinate Transportation Infrastructure Finance and Innovation Act (TIFIA) loan.
In addition, Fitch has assigned a PPP Grantor Counter-party rating of 'AA-' to the MDOT Purple Line project fixed annual payments. The Rating Outlook for all instruments is Stable.
The rating is primarily driven by the design, build, operation and maintenance and light rail vehicle parent company guarantees from Fluor Corporation. It is further driven by additional features that include a highly capable team of contractors that have experience with similar large-scale capital projects; a strong revenue-paying grantor; and well-defined payment mechanism and operating standards.
The final ratings are contingent upon the receipt by Fitch of final documents and legal opinions conforming to information already received and reviewed as well as the final pricing of the bonds.
The Purple Line is a 16-mile light rail line that runs east-west inside the Capital Beltway between Bethesda in Montgomery County and New Carrollton in Prince George's County with 21 stations planned that will provide direct connections to Metrorail's Orange Line, Green Line and two branches of the Red Line, and the MARC Brunswick, Camden and Penn Lines.
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