Donna Locascio of Donaldson, Lufkin & Jenrette Securities was elected to the first team as the All-American Transportation Analyst for the second straight year.

Andrea Bozo of Fitch was the second team All-American Transportation Authority analyst. Ms. Bozo finished a clear second and may have established herself to make a run for top honors in 1993.

Basically, bond volume in the transportation sector continues to be high, both in terms of dollar amount and number of deals, according to Ms. Locascio.

This is due to advance refundings and a tremendous need for renovation and expansion in the sector, she added.

Donaldson, Lufkin & Jenrette expects new-issue volume to remain high, given the sector's tremendous needs. Rates would have to drift at least 50 basis points lower for additional refunding activity to make sense, Ms. Locascio said.

She spends most of her time in toll roads and airports. Starting in the toll road sector, Ms. Locascio believes most toll roads have seen a decline in passenger and commercial traffic due to the weakened state of the economy. But most have been able to offset revenue declines by increasing toll rates or through savings generated through refundings.

The toll road sector continues to perform well and we would expect toll roads to continue as the preferred method of financing highway expansion.

There are two events in the sector that will promote the use of toll road financings. First, the Intermodal Surface Transportation Efficiency Act (ISTEA) of 1991 is supposed to provide greater funding for toll roads.

Under the new legislation, toll revenues can be mixed with federal funds on the same highway. Previously, this comingling was prohibited.

Since toll roads are probably the most efficient way for users to pay for the highway, in contrast to issues backed by gas taxes or motor vehicle registration fees, we would expect to see more toll road financing.

But the problem with the legislation is its complexity. Many states may not have fully understood how ISTEA may benefit their highway financings. Also, there are questions about how much funding at the federal level will be available, given the problems with the federal budget deficit.

Second, automated toll collection systems are beginning to be implemented, which will allow a driver to pay tolls without coming to a complete stop. Electronic devices can automatically collect information on toll road use and send bills to drivers' homes on a monthly basis.

Overall, Donaldson, Lufkin & Jenrette continues to like Illinois State Toll Highway bonds at a double-A minus, also the rating from Fitch, whereas Standard & Poor's and Moody's rate them A1/A plus.

Ms. Locascio noted that good financials and advance refundings have really helped the Pennsylvania Tumpike Authority, which was upgraded earlier this year to a single-a plus by S&P.

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