Fitch Ratings, one of the three major credit rating agencies, maintained its designation of “BBB” for the Colorado Department of Transportation’s C-470 express lane project, but cautioned that a lower rating is possible in the future.

“Because the project is not yet operational, the review was more streamlined as compared to other managed lanes projects,” said Scott Monroe, director of Fitch’s Global Infrastructure and Project Finance Group. “Also, because the project is not yet opened, it is not immediately susceptible to COVID-19-related traffic and volume declines, though there could be longer-term effects on the facility if the economy is weighed down for an extended period.”

He added that the express lanes could end up opening during a period of weak traffic and revenue, and therefore would experience a slow flow of revenue initially.

The C-470 project will add two express lanes westbound from Interstate 25 to Colorado Boulevard, one express lane between Colorado and Wadsworth boulevards, and an express lane eastbound from Platte Canyon Road to I-25, all of which will be tolled. CDOT originally estimated that it will cost between $4-$6 to travel westbound during peak congestion periods, although The Denver Post recently reported that the toll could be as high as $6.60.

CDOT will also reconstruct the existing pavement, realign curves, and widen and replace bridges throughout the work zone. The department estimated that 100,000 vehicles use the 12.5-mile road segment each day, and that traffic will increase by 40% by 2035. 

The total cost of construction is $276 million, of which $110.6 million will come from state and federal sources. Douglas County will contribute $10 million, and toll revenues will repay the loan-funded balance. As of August 2019, the work was 83% completed.

“We generally don’t respond to agencies’ outlook statements,” said Matt Inzeo, the department’s communications director. “Construction is ongoing, and when we are able to provide more specific updates around the project we will get those out.”

Fitch reported that generally speaking, the COVID-19 pandemic has caused traffic declines on managed lane projects, which encompass tolled lanes as well as other traffic-control features like reversible flow or occupancy restrictions. Truck traffic is only down 10% to 15% across all toll roads, but the company said that in total, toll lanes are operating under “extreme no-congestion conditions.”

“The value proposition of [managed lanes] stems largely from time savings and reliability, both of which are severely impaired if not entirely absent in today’s environment,” Fitch wrote. Nevertheless, a perceived sense of safety, payment of tolls by an employer, or habitual use of toll roads may all contribute to continued use of the lanes even as people largely work from home and cancel travel plans.

Fitch noted that C-470’s outlook is listed as “negative,” meaning that a decline in credit rating is possible. But the current “BBB” rating could move to “stable” depending upon “solid traffic and revenue performance” early on in the lanes’ operation. “BBB,” while not the strongest ranking for bonds, is still considered “investment grade.”