KBRA Affirms BBB- Rating for San Bernardino County Transportation Authority’s Toll Revenue Second Lien Obligation, 2021 TIFIA Series
24 Jun 2025 | New York
KBRA affirms its BBB- rating for San Bernardino County Transportation Authority’s $225 million toll revenue second lien obligation, 2021 TIFIA Series. The Outlook is Stable.
Key Credit Considerations
(+) Completion of Construction
Following over four years of construction, the I-10 Express Lanes became fully operational on August 28, 2024. The newly opened 10-mile segment represents a critical regional connector, improving eastbound and westbound mobility between Los Angeles, San Bernardino, and Orange counties. KBRA will continue to monitor the long-term traffic volumes and overall usage of the road through the ramp-up period.
(+) Positive Traffic Volumes
For the period beginning in September 2024 through February 2025, the express lanes reported around 5.9 million trips in total, with annual average daily traffic (AADT) of 32,648 trips. In the short term, the road has demonstrated consistent usage as monthly traffic volumes remained steady over the six-month period.
(+) Strong Financial Performance
Toll revenues for the period beginning in September 2024 through April 2025 show a positive trajectory totaling $12.3 million. The revenues were driven by both strong trip volumes and an increase in the minimum toll rate implemented prior to the facility’s opening. The toll rate increase had little to no impact on usage, suggesting that demand is relatively inelastic, and drivers already see value in using the express lanes. KBRA will continue to monitor the traffic volumes in the coming surveillance periods.
(-/+) Outstanding Balance
The final draw on the TIFIA loan was submitted on September 15, 2024, and disbursed on October 1st, 2024. After such draw, the total amount available of $225 million has been drawn. As of December 31, 2024, the loan capitalized $9.9 million of interest, leaving an outstanding balance of $234.9 million. According to the loan agreement, interest on the loan will continue to be capitalized through June 2027.
Surveillance Rating Rationale
The affirmation of the BBB- rating is based on the successful completion and opening of the I-10 Express Lanes in August 2024. The project has demonstrated stable demand since opening, with AADT from September 2024 to February 2025 of 32,648 trips. Toll revenues have exceeded $12.3 million as of April 2025, reflecting strong usage and limited sensitivity to the preopening toll rate increase. Additionally, the outstanding TIFIA loan balance remains at $234.96 million, which is consistent with KBRA’s expectations.
Outlook
The Stable Outlook reflects KBRA’s belief that the express lanes will continue to perform consistently throughout the ramp-up phase, with stable trends in both traffic and revenues. A rating upgrade during the ramp-up phase and the payment-in-kind (PIK) period is unlikely. KBRA may lower the rating if traffic and revenues underperform compared to KBRA’s rating case, resulting in lower-than-expected future ridership that could impact the project’s ability to generate the required cash flows to cover its mandatory debt service.
Rating Sensitivities
KBRA could upgrade the rating if traffic ramp-up and toll revenues are significantly better than expected and consistently out perform KBRA’s projections.
KBRA may downgrade the rating if traffic volumes are significantly lower than KBRA’s projections during the operations phase.
ESG Considerations
Environmental Factors
California has set ambitious goals for carbon reduction, including achieving carbon neutrality by 2045. Traffic on the project corridor is heavily commuter based; regulation or policies that discourage single-occupancy vehicles typically used by commuters could impact traffic levels and tolling revenues.
Social Factors
The I-10 is a critical link between Los Angeles County, San Bernardino County, and Orange County. Project revenues rely on traffic volumes, which can be influenced by a multitude of social factors including employment levels and household income.The project benefits from a diversified local economy with GDP per capita, median household incomes, and population growth all higher than their respective national averages.
Governance Factors
Funding for the I-10 Express Lanes comes from various state and federal programs. Changes to the regulatory or political environment and related policies and strategies could impact the project or the borrower’s ability to receive further funding at a later date if necessary. Further, one of the differentiating factors of this transaction compared to similar project financings is that the borrower is not a single-purpose vehicle. Instead, SBCTA is the sole borrower of the transaction, and we view its operational history and position as a public entity as credit positives. Policy changes or a lack of transparency could negatively impact the project
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