Agencies rate Penn bridges PABs as financial close moves closer

Almost $1.9bn of tax-exempt Private Activity Bonds (PABs) have been assigned credit ratings for the Pennsylvania Department of Transportation (PennDOT) Major Bridges P3 scheme.

Credit: PennDOT

Moody’s has assigned a Baa2 rating to the bonds, issued by Bridging Pennsylvania Developer I, while Fitch has assigned a BBB-(EXP) expected rating.

The ratings mean that financial close on the controversial Major Bridges P3 project is nearing, with agreement between PennDOT and the Bridging Pennsylvania Partners consortium, led byMacquarie and Shikun & Binui.

The design, construction and maintenance of the six bridge projects under the contract will be delivered by a 50-50 construction joint venture of Shikun & Binui-America and FCC Construction.

PennDOT’s Major Bridges P3 initiative has faced challenges as communities opposed plans to use tolls to pay for their development. In September, PennDOT pivoted to use an availability-based approach, with the private partner being paid regular instalments for ensuring the bridges are ‘available’ for use.

That move has meant that the initial program, comprising nine bridges, has had to be scaled back to only six bridges.