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Credit Agency: I-69 Section 5 Default ‘Appears To Be Inevitable’

The final stretch of I-69 will follow the existing route of State Road 37 from Martinsville to Indianapolis.

Credit ratings agency Standard and Poors says it’s more likely the section of I-69 from Bloomington to Martinsville will be finished if the state takes the project over from the private developer.

This week, S&P downgraded the bonds being used to fund construction to a ‘CCC-‘ from a ‘B-‘.

“The rating action reflects our view that absent unanticipated significantly favorable changes in the developer’s circumstances, a default appears to be inevitable within six months,” said S&P Global Ratings credit analyst Tony Bettinelli in the ratings report.

Section 5 is being built through a public-private partnership between the state and I-69 Development Partners.

According to an Indiana Finance Authority analysis, there’s a $164 million gap in the funding available for construction and the money needed to finish Section 5.

The IFA says it’s offering to buy out the bonds and take the project over, but the bond holders haven’t accepted the offer.

The project was supposed to be complete by October 2016, but the developer announced its first delay in April of last year. Several issues with construction followed, including a pay dispute that caused at least one subcontractor to walk off the job. Several local politicians called on the state to take over control of Section 5 construction following the dispute, but the IFA said at the time those requests were premature.

In April, another credit ratings agency downgraded the bonds, saying it’s unclear where money will come from to complete construction.

Despite the overall delays with construction, the IFA says there will be four lanes of traffic open through the greater Bloomington area in August of this year.

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