Donna LoCascio of Donaldson, Lufkin & Jenrette Securities Corp. was elected to the first team of All-American Municipal Analysts in the Transportation Revenue Bond sector.
Eileen Hopkins of John Nuveen & Co. was named to the second team.
Financial Security Assurance Co.' Frank Minerava and Wai-Man Seto garnered enough votes to take the category, on a team basis, for FSA.
LoCascio's focus is primarily on airports and tollroads in the transportation sector.
"The new airport in Denver is making airport analysis fun again," she said.
LoCascio recently upgraded her rating of the Denver airport revenue bonds from a BBB - level with a declining trend to a BBB- level and a stable trend.
Her initial rating was done after Continental Airlines sought bankruptcy protection from its creditors and United Airlines had not signed up to use the facilities.
The upgrade was made after United Airlines recently signed up to use the new Denver airport.
"I'm still extremely cautious about the new airport bonds because I'm not sure if Denver need to build such a large and expensive airport," Lo Cascio added.
In general, her analysis of airports is conducted against the background of declining to stabilizing enplanements.
Also, there is a consolidation in the airline industry that may result in about five companies surviving.
"It's back to basics, with an emphasis on origination and destination because you cannot be sure about the hubbing traffic," she added.
For example, LoCascio likes Miami Airport, because of the many tourists and the South American routes.
She also believes that Atlanta's airport has rebounded nicely.
Harris County Tollroad Gets Green Light
In the toll road sector, Locascio recommends buying Harris County, Texas, tollroad senior lien revenue bonds. "They've recently completed construction of the Sam Houston and Thomas Hardy toll roads under budget and traffic is picking-up on the roads," she said.
She also likes the Port Authority of New York and New Jersey bonds. "They have a good mix of toll facilities and airports," she said.
NJ Turnpike Bond Refunding
The New Jersey Turnpike Authority poses problems for bondholders, Locascio said.
Environmental problems delayed construction of roads the turnpike planned to build. As a result the NJ Turnpike plans to refund $500 million of debt issued in 1984 and about $2 billion of 1985 bonds.
She estimates that between $300 million to $700 million of the 1985 bonds may be called at par, instead of the 103 mark refunded bondholders may receive, because the proceeds from the original issue will not be used.
Unfortunately, the NJ Turnpike defined itself as being from point A to point B, which meant it could not purchase the access roads that the state of NJ already built.
Hence the refunding of the old bonds with restrictive language, she explained.
"Most investors are going to take their chances," she said, rather than sell the bonds only to find they missed making a profit at the refunding price.