KBRA Affirms BBB Rating for Michigan Strategic Fund Limited Obligation Revenue Bonds (I-75 Improvement Project), Series 2018
14 Nov 2025 | New York
KBRA affirms its BBB rating for the Michigan Strategic Fund Limited Obligation Revenue Bonds (I-75 Improvement Project), Series 2018 (the bonds) issued by the Michigan Strategic Fund for the Michigan I-75 Modernization Project (the project). The Outlook is Stable.
Oakland Corridor Partners LLC (OCP) is a special-purpose limited liability company formed to develop and maintain the project (1.5 miles of rural freeway, four miles of urban depressed freeway with service drives, a storage and drainage tunnel, and pump station, all located within Oakland County, Michigan) pursuant to a public-private partnership (P3) design-build-finance-maintain agreement (the project agreement) with the Michigan Department of Transportation (MDOT). OCP is indirectly owned by four private sector sponsors: John Laing Investments Limited (70%), Ajax Paving Industries, Inc. (10%), Dan’s Excavating, Inc. (10%), and Jay Dee Contractors, Inc. (10%).
Key Credit Considerations
(+) Availability Payments Received
The developer submitted availability payment invoices for $51,923,328 from Q4 2024 through Q3 2025. Availability payments through Q3 2025 are slightly above KBRA’s rating case expectation of $50,119,680, resulting in a debt service coverage ratio (DSCR) of 1.17x, which is above KBRA’s expected 1.15x.
(+) No Deductions From Unavailability Events
There were no deductions to availability payments due to unavailability events from Q4 2024 through Q3 2025. In August 2025, three noncompliance points were assessed related to a sign repair completed two days late due to scheduling issues. However, no deductions were applied to availability payments.
Surveillance Rating Rationale
KBRA affirms its BBB rating, given the operating performance—which is in line with our expectations—and the average DSCR of 1.15x during the maintenance term under the KBRA rating case.
Outlook
The Stable Outlook reflects KBRA’s view that OCP can successfully operate and maintain the project with limited interruptions to availability. However, a rating upgrade is unlikely due to the DSCRs required to achieve a higher rating.
Rating Sensitivities
A rating upgrade is unlikely at this time due to the DSCRs required to achieve a higher rating. KBRA may downgrade the rating if DSCRs are consistently lower than KBRA’s projections during the maintenance term.
ESG Considerations
Environmental Factors
The project will add a crucial storage and drainage tunnel and pump station to prevent any future flooding; in the past, heavy rains have overwhelmed the freeway’s drainage system and flooded the low-lying I-696 Interchange.
Social Factors
This portion of the I-75 is a key commercial, commuter, and tourist route handling a daily traffic volume of 103,000 to 174,000 vehicles, which is projected to increase 10% by 2035. The corridor exhibits aging infrastructure that has not received comprehensive improvements since being built in the 1960s. The project will add much-needed capacity and critical infrastructure to the corridor that will help relieve traffic congestion and improve surface driving conditions and safety.
Governance Factors
The milestone payments and availability payments are subject to annual appropriation by the Michigan legislature. MDOT is expected to use funds in the State Trunk Line Fund to make the milestone and availability payments. KBRA views appropriations risk to be low, given that MDOT is a highly creditworthy governmental entity and milestone payments and availability payments account for a very small percentage of MDOT’s annual highway investment expenditure (less than 1% and 4%, respectively).
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