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Rocky Mountain News Northwest Parkway's bonds fall to junk status by Kevin Flynn, Rocky Mountain News staff writer The failure of the deal will have little impact on drivers. They face a toll increase in two weeks, but that had been on the tollway's schedule since 2001 as part of the initial financing plan. The rating has more impact on investors' ability to trade the bonds than on drivers' ability to get from Broomfield to Denver International Airport via the tollway. Still, the 2-year-old toll road's failure to live up to optimistic traffic projections continues to threaten its finances. Steve Hogan, executive director of the parkway, said that when the bonds were taken to investors for pricing, they demanded higher interest rates than the authority was willing to shoulder. "We weren't happy with some of the interest rate responses we were getting," Hogan said. "So rather than do something we shouldn't do, we said no, we'll be back another time." Fitch Ratings, which issued the downgrade to a noninvestment-grade double-B rating Friday afternoon, warned that under current conditions the parkway has enough internal reserves to meet only about three more years of operating expenses and debt payments before it will face a crisis. Hogan, however, painted a more optimistic picture. He said toll revenues for the first time are projected to exceed operating expenses next year. Debt service on top of that will be $8.4 million next year, but the parkway has $14.5 million left from construction funds that it can use before touching its $41.3 million of bond reserve funds. The 11-mile toll road through the northwest metro area has failed to attract the amount of traffic and toll revenue predicted when the bonds were sold in 2001. Wall Street bond rating agencies were on the verge of downgrading the bonds in the fall before the toll road board decided to attempt a financial restructuring. At that point, Wall Street agreed to wait. But when the deal was scrubbed, the wait ended. "We were getting penned in by the investors," said Dave Klinges of Bear Stearns in New York, the parkway's financial adviser. "We could have gone through with the deal, but we thought that we could do better. We could be back in January after making a few changes." "It was our recommendation that we could get better terms later." |
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The following organizations endorse CINQ’s position: Colorado Environmental Coalition, Plan Jeffco, Friends of the Foothills, Canyon Area Residents for the Environment (CARE), Blue Mountain Land & Homeowners Association, Apple Meadows Homeowners Association, Village at Mountain Ridge Homeowners Association, Meadow Run Homeowners Association, and Harmony Village Community Association. |