NEW YORK--(BUSINESS WIRE)--Link to Fitch Ratings' Report: 2014 Outlook: U.S. Transportation Infrastructure (Stable with Some Macro Challenges) http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=726355
The 2014 outlook for airports, ports, and toll roads is stable despite tepid growth, according to a new Fitch Ratings report.
'The growing use of Public Private Partnership, or P3, transactions to construct new or expand existing projects is largely motivated by limited resources at the state and local level, combined with uncertainty on future federal funding levels,' said Scott Zuchorski, Director in the Global Infrastructure Group.
'While not a panacea for all funding issues, governments are increasingly looking to P3s for transportation projects where the economics make sense. Two-thirds of states currently have P3 enabling legislation in place, and given the size of future capital needs, Fitch expects transportation P3s to continue to rise in 2014.'
The outlook for U.S. airports is stable for 2014, supported by stable traffic trends, positive industry fundamentals, strong capital development program execution, and sound financial operations. Traffic performance across all U.S. airports should continue to move in a modestly positive direction in 2014, in the 1.5 percent to 2.5 percent range. The American/US Airways merger may lead to network realignments, though due to settlement terms protecting incumbent hubs this process may take some time. Fitch will pay special attention to airports with higher leverage or committed to large capital programs as the merger comes into effect.
The outlook for U.S. ports remains stable for 2014, with flat to modest improvements in port throughput and largely stable revenue profiles expected. Macroeconomic trends both in the U.S. and globally will affect throughputs and shifts in trade volumes, though contracts at the largest ports should insulate cashflows from volume volatility. Effects of shipping alliances on service frequency and cargo volumes, particularly the P3 alliance in 2014, continue to be monitored, as do expansionary capex programs at several ports. Fitch expects ongoing negative pressure on throughput as U.S. consumers continue to exercise caution.
The 2014 outlook for the U.S. toll roads sector is stable, reflecting continued slow growth in aggregate driving across the country. Even in a declining traffic scenario, mature assets and systems with a combination of pricing power, robust liquidity and moderate leverage retain considerable resilience to sustain current rating levels. Forecasting risk remains high for recently constructed or green field standalone projects, which may be more vulnerable to a sustained weak economic environment.
The current outlook for GARVEE bonds is stable. Uncertainty remains over the future of federal transportation funding with MAP-21 set to expire at the end of September 2014. Fitch does not expect sequestration, as currently contemplated, to have a material impact on timely payment of GARVEE bonds.
Fitch will host a conference call to discuss its 2014 US Transportation Outlook on December 11th at 2:00 PM eastern.
Dial-in Numbers:
--U.S. Participants: +1-877-467-8597
--International Participants: +1-706-643-6296
--Conference and Replay ID: 17256366
--Replay will be available for 30 days:
--U.S. Replay: +1-855-859-2056
--International Replay: +1-404-537-3406
For more information, a special report titled '2014 Outlook: US Transportation Infrastructure' is available on the Fitch Ratings web site at www.fitchratings.com.
Additional information is available at 'www.fitchratings.com'.
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