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MIAMI-Fitch Ratings has assigned an A rating to a planned $40 million Miami-Dade County Expressway Authority toll system refunding revenue bonds issue.

But the New York firm cautions even that sum may not be enough to solve the area’s road and transportation problems, a situation that could affect most future commercial/industrial real estate development.

The series 2002 bonds will be sold through a syndicate to be formed by Wall Street-based Salomon Smith Barney at an undetermined date depending on market conditions.

The biggest transportation problem is Miami-Dade county is physical capacity. “Certain roadways are filled beyond capacity, making levels of service unsatisfactory,” Fitch says in a prepared statement.

“While MDX’s $1.6 billion capital improvement plan was expected to provide some relief, albeit not expected to stem the tide, the pace of progress has been significantly slower than expected,” the statement says.

The county’s capital improvement plan reduced debt levels but “it also raises the specter of unmet expectations,” Fitch says. Toll increases were enacted in 1999 and again in 2001 when the public lashed its elected officials for poor road conditions.

“Future toll increases will be necessary toa bsorb additional debt while maintaining bondholder security,” Fitch says. “To the extent that MDX is perceived as not meeting its public mandate, the ability to implement toll increases and maintain bondholder security, commensurate with this rating level, could come into question.”

The rating firm says, “While the pros and the cons largely offset each other now, MDX’s track record in the delivery of system improvements and expansions over the next few years, while maintaining a strong financial profile, will be key rating factors.”

Fitch says “pure net revenues must provide sum sufficient coverage of all obligations on an annual basis.” At the same time, the firm says “the sum total of these changes has the effect of slightly weakening the legal strength of the credit.”

Fitch says Miami-Dade is now in a position to better manage expense levels. “Over the next few years, a more normal trend should emerge,” the firm says, despite “the fact that the pace of progress has been slower than expected.”

Fitch analysts who prepared the report are Cherian George, William Streeter, Scott Trommer and Matt Burkhard.

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