I-69 Bonds Downgraded to “Junk” Status by Joshua Claybourn

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I-69 Bonds Downgraded to “Junk” Status by Joshua Claybourn

Citing construction delays and slow payments to subcontractors, Fitch Ratings has downgraded the bonds issued to finance the construction of Interstate 69 between Bloomington and Martinsville. An Aug. 5th report from the bond ratings service expresses doubt that the section of I-69 will be complete by its deadline in June 2017. Fitch lowered its rating from a BBB- to a BB, which technically means it is in “junk bond” status. According to Fitch’s rating scale, the move drops the bonds into the “speculative” category, with “an elevated vulnerability to default risk” for investors who hold those bonds.

This marks the second time Fitch has downgraded the bonds. In April, the ratings agency dropped the bonds from a BBB rating to a BBB-. The Indiana Finance Authority (IFA) issued the bonds in 2014 in the amount of $243.8 million. Proceeds from the sale of those bonds are helping finance the construction of Section 5 of I-69, which involves upgrading 21 miles of State Road 37 to interstate standards. The IFA selected I-69 Development Partners LLC as the developer of Section 5, and the company in turn hired Isolux Corsan as the construction contractor. In its statement, Fitch also noted that Isolux’s parent company, Spain-based Isolux Corsan SA, has had its own problems with deteriorating credit quality. Isolux Corsan SA is in the midst of a financial restructuring plan.

 

EDITOR FOOTNOTE: Joshua Claybourn is Counsel in Jackson Kelly’s Evansville office. He advises clients in matters of business and corporate law, governmental services, and public finance.
A native of Evansville, Mr. Claybourn is a graduate of the Indiana University Kelley School of Business and the Indiana University McKinney School of Law. He was recognized by Indiana Lawyer in its first statewide award as an “Up and Coming” lawyer. He is actively involved in the community and helps lead and support several civic and non‑profit organizations.

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  3. Look at the picture, looks like a huge Trump fan. They don’t support Hillary or other Democrats.

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