CENTENNIAL (S&P Global Ratings) - S&P Global Ratings raised its long-term rating on North Carolina Turnpike Authority’s (NCTA) Monroe Expressway senior toll revenue bonds, series 2016A and 2016C, and the authority's 2016 subordinate Transportation Infrastructure Finance and Innovation Act (TIFIA) loan to 'BBB' from 'BBB-'. The outlook is stable.

The upgrade reflects the application of our "U.S. And Canadian Not-For-Profit Transportation Infrastructure Enterprises" criteria.

"The ratings reflects our opinion of the toll road's adequate enterprise risk and financial risk profiles and the uncertainty associated with forecasting traffic and revenues on new tolled facilities that recently opened," said S&P Global Ratings credit analyst Ken Biddison. The enterprise risk profile reflects the ramp-up risk and volume risk as the toll-road faces competition from free alternatives although the project benefits from favorable oversight and underlying economic fundamentals. The financial risk profile reflects the requirement for reasonable annual growth in revenues, transactions, and tolls to meet base-case projections of debt service coverage from a high debt burden, although the North Carolina Department of Transportation adds flexibility by guaranteeing to replenish the operation and maintenance and renewal and replacement fund if needed.

The expressway consists of an approximately 20-mile all-electronic tolling roadway extending from US Highway 74 at Interstate 485 in eastern Mecklenburg County, N.C., to U.S. 74 near Marshville. It provides travelers a limited access, four-lane road and an alternate and timesaving route for travelers who are currently taking U.S. Highway 74 through the Town of Monroe and several other communities.

The stable outlook reflects our opinion that the project will continue to perform near projections.

Although unlikely, S&P Global Ratings could raise the rating in the two-year outlook period if traffic levels significantly outperform the forecast and we believe these levels are sustainable.

S&P Global Ratingse could lower the rating during our outlook period if actual results fall below the forecast.