The Rating Outlook is Stable.
KEY RATING DRIVERS
Federal Program Future Uncertain: The commission's receipt of Title 23 funds from the
Strength of the Federal Program - Midrange
Strong Covenants and Timing Mechanisms: Additional leverage is limited by a strong additional bonds test (ABT) of 4.0x maximum annual debt service (MADS). The 12-year maturity of each note series helps mitigate reauthorization risk.
Structural Features - Stronger
Little Flexibility to Adjust: The Project Notes have no backup pledge of state funds or debt service reserve fund, but the commission would use available cash balances in a delay of federal funding.
Flexibility of the
--Federal Program Becomes Weaker: A change in Fitch's view of the strength of the Federal program to weaker from midrange;
--Lower Federal Revenues or Increased Leveraging: Declines in Federal revenues below projected levels or additional state leveraging that leads to debt service coverage ratios materially below current projections.
The notes are secured by the pledged receipts of the commission, which receives financing payments pursuant to a financing/lease agreement with Kentucky Transportation Cabinet (KYTC). Financing payments from KYTC are made solely from federal transportation funds and are subject to appropriation by the
The Series 2014A Project Notes will fund project development activities related to the reconstruction of US 68/KY 80 from
The Kentucky Transportation Cabinet conservatively budgets flat receipts based on federal fiscal year 2013 at
Under the provisions of the constitution of
KYTC is responsible for the construction, reconstruction, and maintenance of
Additional information is available at 'www.fitchratings.com'.
--'Rating Criteria for Infrastructure and Project Finance'(
--'Leveraging Federal Transportation Grants'(
Rating Criteria for Infrastructure and Project Finance
Leveraging Federal Transportation Grants -- Effective
Source: Fitch Ratings
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