Morningstar DBRS Discontinues and Withdraws Rating on San Bernardino County Transportation Authority I-10 Express Lanes Project

Why It Matters

The rating removal eliminates a key reference point for investors evaluating the project’s debt, potentially affecting liquidity and pricing in the infrastructure finance market.

Key Takeaways

• $225M TIFIA loan rating withdrawn at issuer’s request.
• Rating removal does not reflect credit deterioration.
• No ESG factors influenced the credit analysis.
• DBRS applied its PPP and TIFIA rating methodologies.

Pulse Analysis

The Transportation Infrastructure Finance and Innovation Act (TIFIA) program provides low‑cost, long‑term loans to critical U.S. infrastructure projects, and rating agencies like Morningstar DBRS play a pivotal role in assessing the creditworthiness of these financings. By applying its Global Methodology for Rating Public‑Private Partnerships and specific TIFIA supplements, DBRS offers investors a standardized view of risk, which is especially valuable for large‑scale, revenue‑linked projects such as the I‑10 Express Lanes in San Bernardino County. The agency’s rating process also integrates ESG considerations, although in this case none were deemed material.

The decision to discontinue and withdraw the rating, requested by the issuer, removes a publicly available benchmark that lenders and bond investors often rely on for pricing and covenant monitoring. While DBRS clarified that the withdrawal does not signal a deterioration in the project’s credit profile, market participants may interpret the absence of a rating as increased uncertainty, potentially widening spreads or prompting tighter covenants on future financing. For the authority, maintaining transparent communication with investors becomes essential to mitigate any perceived risk premium.

Beyond this single transaction, the episode underscores a broader trend in infrastructure finance: issuers increasingly manage their rating exposure, sometimes opting out of formal assessments to preserve flexibility. Rating agencies, meanwhile, must balance methodological rigor with the evolving preferences of public‑private partners. As ESG integration continues to mature, the explicit statement that ESG factors were immaterial here may reassure stakeholders that the project’s financial fundamentals remain the primary focus, while also highlighting the need for consistent ESG disclosure standards across future PPP and TIFIA deals.