Market Overview

S&P Global Ratings Upgrades Foothill/Eastern Transportation Corridor Agency Senior-Lien Toll Revenue Bonds Three Levels to A-


Rating agency report cites strong market economics, transaction
growth, management and governance of the 133, 241 and 261 Toll Roads

In yet another indication of the financial strength of the
Transportation Corridor Agencies and the Orange County toll roads
system, S&P Global Ratings has upgraded the Foothill/Eastern
Transportation Corridor Agency's senior-lien and junior-lien bonds to A-
and BBB+ respectively, with outlook stable.

The Foothill/Eastern Transportation Corridor Agency operates the 133,
241 and 261 Toll Roads in Orange County, Calif. In Fiscal Year 2018, the
routes recorded 69 million transactions and have experienced
year-over-year growth for the last four years.

"The road's market position is strong, in our opinion," stated S&P
Global Ratings in the RatingsDirect report dated August 16, 2018. "It is
in an area that relies on the road network; its role as a congestion
reliever with surrounding free alternatives, which are among the most
heavily trafficked and congested in the country, leads us to believe
that the [133, 241 and 261 Toll Roads are] becoming a virtual
requirement for drivers who depend on saving time."

"S&P Global's decision to upgrade the bonds is a reflection on how hard
the Board of Directors and staff have worked to ensure that The Toll
Roads are financially stable and that the Agency is positioned to
provide excellent service and be sustainable into the future," said Ed
Sachs, Chair of the Foothill/Eastern Transportation Corridor Agency and
Mayor of Mission Viejo. "It is also an indicator that Orange County's
economy is strong and that The Toll Roads are an asset that provides
congestion relief for the region."

"Every day, more and more people choose to drive The Toll Roads because
of the predictable time savings and free-flow traffic conditions," said
Christina Shea, Vice Chair of the Foothill/Eastern Transportation
Corridor Agency and Irvine City Councilmember. "S&P Global's rating
upgrade reflects the positive year-over-year traffic growth on The Toll
Roads and the high value of mobility in Southern California."

Last month, S&P Global also upgraded the San Joaquin Hills
Transportation Corridor Agency's 73 Toll Road bonds two notches to A-
also citing Orange County's strong economy and consistent transaction
growth for the 15-mile route.

This positive action by S&P follows a trend of credit upgrades by all
three major credit rating agencies over the past two years.

Transactions on the 73, 133, 241 and 261 Toll Roads have grown more than
20 percent since 2014. In Fiscal Year 2018, transactions totaled 101
million, which directly corresponds to trips not using city streets and
congested Interstates 5 and 405 and State Route 55.

Since the bonds were restructured in 2013 and 2014 to take advantage of
historically low interest rates and to align the debt structures with
actual growth trends, combined annual toll revenues have grown more than
40 percent to $380 million due to the increase in transactions and small
inflationary annual toll increases. The results have exceeded
projections and required reserves have been filled.

The San Joaquin Hills and Foothill/Eastern Transportation Corridor
Agencies are two joint powers authorities created to plan, finance,
construct and operate Orange County's 51-mile toll road network – the
73, 133, 241 and 261 Toll Roads. The Toll Roads have been providing a
choice for drivers for more than 20 years and the tolls collected are
used to fund debt service issued to construct the system, operations and
capital projects. Currently, more than 330,000 daily transactions are
recorded on The Toll Roads system, which represents 20 percent of Orange
County's highways and is the largest toll road network in California.

The Transportation Corridor Agencies (TCA) are two joint
powers authorities formed by the California legislature in 1986 to plan,
finance, construct and operate Orange County's 67-mile public toll road
system. Fifty-one miles of the system are complete, including the 73,
133, 241 and 261 Toll Roads. TCA continues to meet the region's growing
need for congestion-free transportation alternatives.

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