TEXT-Fitch raises Fla. Dot's $270mm TIFIA loans to 'A-' from

Wed Jul 11, 2012 10:45am EDT

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July 11 - Fitch Ratings upgrades the Florida Department of Transportation's
(FDOT) $270,000,000 Transportation Infrastructure Finance and Innovation Act
(TIFIA) Rental Car Facility (RCF) loan for the Miami Intermodal Center (MIC) to
'A-' from 'BBB'. The Rating Outlook is revised to Stable from Positive.

The upgrade is based on successful project completion including the rental car
facility and associated MIA Mover project, a year of successful operations and
better than expected rental car activity and related customer facility charge
(CFC) collections. The combination of these factors as well as lower project
operating costs could result in the TIFIA loans being repaid well ahead of prior
forecasts. The rental car facility was completed in July 2010 while the MIA
Mover was placed in operation in September 2011. Since opening of these
facilities, project operating costs appear to be within budget.

With the support of strong airport passenger traffic growth at Miami
International Airport over the past three years, rental car transaction days
have surged 24% which is well ahead of earlier forecasts. Revised base case
forecasts indicate the TIFIA debt can be paid off in 2024, which is well ahead
of both the initial projection of 2037 when final TIFIA loan was made in 2007
and the TIFIA scheduled final maturity of 2044.

KEY RATING DRIVERS:

STRONG RENTAL CAR MARKET: Miami International Airport (MIA) is a major
international gateway which supports a sizable rental car market to serve both
international and domestic destination passengers. While rental car transactions
have risen in recent years, some volatility exists in conjunction with passenger
traffic levels. The rental car market is well diversified with 16 participating
companies. Alamo is the largest contributor to customer facility charge (CFC)
revenues and represents about 27% of total collections.

SUPPORTIVE REVENUE FRAMEWORK: Based on existing transaction levels, the project
loans can be repaid solely from the CFC payments. The current rate is $4.60 per
day is moderate when compared to those at other large hub airports and, pursuant
to loan documents, will increase by $0.25 every fifth year starting in 2015. If
CFC collections were insufficient, the rental car companies would be obligated
to pay contingent rent to support a minimum 1.30 times (x) project life coverage
ratio (PLCR).

ESSENTIAL PROJECT WITH CONSTRUCTION PHASE COMPLETED: The rental car facility
(RCF) is an essential airport project as a core element to the Miami Intermodal
Center (MIC) regional transportation hub. Both the RCF and the related Miami
Mover rail-line connecting to the airport passenger terminal have been
successfully completed.

FLEXIBLE REPAYMENT SCHEDULE WITH EARLY AMORTIZATION EXPECTED: The TIFIA loan
structure focuses on ultimate recovery by Oct. 1, 2044 by sizing amortization
payments to a percentage of available funds. Current financial forecasts
indicate full repayment as much as 20 years ahead of the final maturity date
even under scenarios with a significant reduction in transaction days.

IMPROVING FINANCIAL PROFILE: The project has low leverage, robust liquidity and
high debt coverage ratios. The rapid increase in rental car transaction days and
pledged CFCs allows for a favorable project life coverage ratio (PLCR) and net
debt to cashflow available for debt service (CFADS) ratios through maturity.
Even with a modest 1% per annum growth rate in transaction days, average PLCR
and net debt to CFADS ratios would be 4.9x and 3.0x, respectively.

WHAT COULD TRIGGER A RATING ACTION:

--Continued strong performance of CFC revenues and lower operating costs that
allows for ongoing robust PLCR levels and project leverage to fall into the 3.0x
range.
--Reductions in rental car activity in the range of 20% or more from current
levels due to enplanement trends;
--Operational or cashflow underperformance that leads to a potential reliance on
contingent rent from rental car companies to support loan payments.

SECURITY:
The loans are secured by CFCs levied by Miami-Dade County, Florida on rental car
transactions at MIA, and to the extent that CFC revenues are insufficient,
contingent rent on the participating rental car companies operating at the RCF.

CREDIT UPDATE:
CFC revenue and rental car transaction volumes are well ahead of previously
indicated base case forecasts. In fiscal 2011, pledged CFC deposits rose nearly
40% to $37.2 million based on both a 16.5% increase in transaction days and a
scheduled 15% CFC rate increase to $4.60 per day. Activity continues to exceed
expectations as fiscal 2012 figures through April indicate collections of $25.5
million compared to $21.3 million for the same period in fiscal year 2011.
Fiscal 2012 through April had transactions days of 5.5 million, a 20.5%
increase, when compared to transactions days of 4.6 million for the same period
in fiscal 2011. Growth in passenger traffic at the airport is supporting the
recent robust trends in rental car activity, although volatility in performance
is likely over time.

Actual non-transportation RCF operating expenses have come in well below
forecast since the opening of the facility in July 2010. For FY 2012, budgeted
RCF operating expenses total $3.6 million versus a $5 million budget anticipated
in previously provided projections. The MIA Mover linking the MIC to the airport
has opened in September 2011 and it is initially assumed that about half of the
users will be for rental car customers. The Miami Central Station, a rail and
bus station on 16.5 acres, is expected to open in late 2013 which will
essentially complete the entire transportation hub complex.

There is a diverse mix of rental car operators, all of which executed 15-year
contracts that initially extend to 2025. Alamo is the largest operator
comprising about 27% of CFC collections followed by Hertz, Avis and Dollar. All
rental car customers of these signatory operators at Miami airport are required
to use the rental car facility which enables a strong capture of CFCs from all
rental car transactions in the local market.

The TIFIA loans consist of two borrowings totaling $270 million with a scheduled
final maturity in 2044. The loans represent a highly structured financing with a
cash waterfall managed by a trustee using the financial advisor's (Jeffrey A.
Parker) computer model. Periodic interest is accruing through Oct. 1, 2012 with
principal amortization to begin on that date based on 30% of the balance then in
the project's secondary reserve fund. There is no pre-set amortization schedule,
a feature that limits default risk to the final maturity date. Reserves are very
robust, at a combined level in excess of $70 million, when including the
project's operating reserve fund, secondary reserve fund, and debt service
reserve fund.

Fitch's base case forecast taking into account the recent trends in CFC
collections but with a conservative 1% growth rate in future periods, indicates
a repayment date by 2024. This updated amortization is much earlier than the
sponsor's original forecast of 2037. Under this base case, the project life
coverage ratio remains at or above 2.8x while leverage peaks at 6.1x on a net
debt to cashflow basis.

Fitch's rating case analysis, which incorporates a 20% loss in CFC collections
in 2013 followed by a moderate recovery, indicates the final repayment date
could push back to 2027 without the need for levying any contingent rent on the
rental car operators. An amortization date of 2027 is still well ahead of the
final maturity in 2044 and allows for significant flexibility for adverse
developments with rental car activity. Under this rating case, the project life
coverage ratio remains at or above 2.1 times while leverage peaks at
approximately 8.0x on a net debt to cashflow basis.

Additional information is available at 'www.fitchratings.com'. The ratings above
were solicited by, or on behalf of, the issuer, and therefore, Fitch has been
compensated for the provision of the ratings.
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