NEW YORK -- The Florida Department of Transportation (FDOT) has notified Fitch Ratings that some structural damage has been sustained at the Garcon Point Bridge. The Mid-Bay Bridge is open. Toll revenues from the bridges separately secure the revenue bonds of the Santa Rosa Bay Bridge Authority, FL and the Mid-Bay Bridge Authority, FL. The bonds are currently rated 'BB-' (Santa Rosa) and 'BBB+/BBB' (Mid-Bay senior/junior) by Fitch.
Given the damage to infrastructure in the area and the conditions of roads, which include a collapse of Interstate 10 lanes over Escambia Bay and the immediate life-safety focus of emergency services, FDOT has not been able to assess the damage at the Garcon Point Bridge. However, the inherent protections in FDOT's lease-purchase agreement with the Santa Rosa Bay Bridge Authority, FDOT's track record with immediately responding and correcting structural damage, and available property damage and loss of revenue insurance provide considerable protection at the current rating level for the authority's revenue bonds.
Under the lease-purchase agreement, FDOT is responsible for operations, maintenance, and renewal and replacement on the bridges. A few years ago, unexpectedly advanced structural deterioration was detected at the Mid-Bay Bridge. FDOT using its own funds advanced the cost of the repair. Repayment is deeply subordinated and flexible and nonpayment is not an event of default. FDOT has also unilaterally reimbursed the Mid-Bay Bridge for loss of revenue when tolls were voluntarily lifted during and following Hurricane Opal some years ago. The agreement with Santa Rosa Bay Bridge uniquely requires FDOT to reimburse for voluntary toll-free operation. However, the shutdown directly related to the hurricane would likely only be a few days and any related revenue loss relatively small. It is the shutdown due to any potential structural damage that would likely not be covered by the state but instead will depend on insurance recoveries.
The limit of liability for damage to the Garcon Point Bridges is $100 million per occurrence. The business interruption (loss of revenue) coverage limit is $50 million per occurrence. Regardless, FDOT intends to return the facilities to revenue operation at the earliest and seek insurance recovery on a parallel track. Receipt of insurance recoveries is not expected to be a constraint in completion of any required work.
