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Friday, October 28, 2016

Ind. Gov't. - "I-69 bond rating drops for 3rd time this year amid construction disputes"

Some quotes from this story in the $$ Bloomington Herald-Times this morning:

Construction delays along the Interstate 69 segment that will run from Bloomington to Martinsville have prompted a New York-based company to once again downgrade the status of bonds issued for that project, the third downgrade reported this year.

Fitch Ratings said Wednesday it's lowered from BB to B the status of bonds issued on behalf of the segment's private developer, I-69 Development Partners LLC. * * *

The state finance authority sold almost $250 million worth of tax-exempt private activity bonds on behalf of I-69 Development Partners in July 2014 to help finance the $325 million project.

Those bonds were originally given a BBB or investment-grade rating. That rating was lowered to BBB- in April of this year, when the expected completion date was extended by about eight months due to delays in obtaining permits. Further delays in meeting a revised schedule, along with default notices issued by the developer, resulted in an August downgrade to BB. Similar issues are behind the most recent additional downgrade to B.

The downgrade means anyone who bought the bonds when they were originally sold would likely have a difficult time selling them, at least in the current market. In August, Scott Zuchorski, senior director with Fitch, told The Herald-Times that a BB rating from Fitch is below investment grade, or junk. The current B rating is a step below that.

Posted by Marcia Oddi on October 28, 2016 10:03 AM
Posted to Indiana Government