Airports

FGIC's evaluation of airports bonds, specifically those secured by general airport revenues (GARBs), focuses on the underlying passenger demands and traffic trends, the size and strength of the economic base supporting air trade service, access to competing facilities, the diversity and quality of the carrier mix, terms of the airline use agreements, reasonableness of airline rates and charges, future capital requirements and the financial position of the airport. Airports that depend mostly on origination & destination (O&D) traffic typically have more stable traffic trends and more diversity of passenger carriers. Airports that are more dependent on connecting traffic can still be insurable but greater analytical importance is placed on the nature of hubbing and the airport's ability to survive a sharp cutback or complete loss of its dominant hub-based carrier. The form of airline use agreements is an important credit consideration, since it provides the structure of the revenue stream providing payments for operating costs and debt service payments.

Bridges

FGIC's approach to evaluating toll bridge financings includes the number and quality of pledged facilities, the underlying traffic demand, the access or attractiveness for competing facilities, the competitiveness of tolls, and financial strength. A toll-bridge system with multiple facilities along heavily congested roadways is much more favorable for insurability than bond financings tied to either single crossings, discretionary traffic corridors, or start-up projects in untested areas. For existing toll facilities, FGIC will closely review traffic characteristics including the breakdown of vehicle-types and trend-line of demand through different economic cycles.

Garvees

FGIC underwrites Grant Anticipation Revenue Vehicles (Garvees). These bonds are secured by a pledge of future federal grants. In underwriting these transactions, FGIC will review the program's history of federal aid receipts, debt service coverage and anti-dilution tests.

Parking

FGIC underwrites bonds secured by parking revenues. In general, pledges from a system comprised of a broad array of facilities represent stronger credits than the pledge of revenues from a single facility, such as a garage. Specific credit characteristics FGIC analyzes during the underwriting review process encompass assessing demand for the facilities, including the economic base supporting the service, the availability and price of competing facilities, and revenue raising flexibility. FGIC will review agreements for facilities operated under contract or concession. Our financial analysis focuses on debt service coverage, liquidity, and capital improvement programs.

Ports

Ports are extremely capital- and land- intensive entities that operate in a highly competitive business environment. FGIC's review of port transactions focuses on the structural fundamentals, including the strategic benefits of location, quality and ease of inter-modal transport, size, and depth of berths and channels. We also evaluate the adequacy of a port's existing facilities and the level of future capital requirements, particularly as they relate to the port's overall competitive position. Additional credit factors impacting the creditworthiness of a port are the degree of diversity in tenants, the type and structure of tenant lease agreements, the type and destination of cargo, overall trends in international trade and consumer demand, and the strength of historical financial performance and debt service coverage.

Toll Roads

Traffic demand is the most essential ingredient for a financially successful toll road operation. FGIC's credit analysis focuses on travel patterns, the need to relieve traffic congestion and reduce travel time for motorists. We evaluate the economic strength and diversity of the toll road's region. We also assess existing and potential competition for the road and the degree of cooperation among various levels of governmental transportation departments. Of particular importance is the ability and willingness of management to increase tolls as needed. Financially, the traditional measure of strength is debt service coverage. Sensitivity analyses are also conducted to simulate normal or historic changes in economic conditions, traffic declines, operating cost increases and toll adjustments to help gauge the project's ability to withstand change.