Credit Outlook: 28 March 2024

...Originally published on 27 March 2024 On March 26, the Francis Scott Key Bridge collapsed in Baltimore after a container ship collided with a support column, removing a key transportation artery in the region and causing presumed fatalities. The accident will deprive the Maryland Transportation Authority (MDTA, Aa2 stable) of toll revenue, though the greater credit risk for the authority lies in the uncertainty of the bridge replacement costs and timing. Reconstruction costs, which are unknown at this point, will be substantial in part because of elevated construction costs driven by high inflation in recent years and a tight labor market. While we believe there will be some level of federal financial support, the amount and timing are uncertain. MDTA replaced its Nice/Middleton Bridge in October 2022 following a 30-month construction period at a $636 million cost. With current market conditions and the fact the Key Bridge was much taller, total replacement costs for it will likely be considerably...

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