Opinion on  The PNC Financial Services Group Inc. (PNC)     Sector: Financial  >  Industry: Regional Banks
Albertis $12.8B Bid to Lease PA Turnpike Expires With No Deal

Spanish infrastructure company Albertis and NY-based Citi Infrastructure have withdrawn their $12.8B bid to lease the Pennsylvania Turnpike for 75 years after state legislators failed to vote on the proposal before an early end to their legislative session to focus on the upcoming election. Earlier in September, the Federal Highway Administration rejected a PA proposal to make I-80 a toll road, resulting in a $450M shortfall in the state's transportation budget when coupled with the failed bid to lease the turnpike.

Governor Rendell stated that the PA Turnpike lease payment could have been invested to generate $1B a year for the state, which would be over two times the current transportation budget shortfall. While the governor is still committed to pursuing legislation to allow a lease of the PA Turnpike, residents now face the prospects of higher gas taxes, new toll roads, and a 25% hike on the PA Turnpike to fund the budget shortfall because of the failed bid.

Of the 11 PA-based banks I wrote about previously, I like the prospects of First Commonwealth Financial (FCF) and PNC Financial Services (PNC) best as they have held up very well during the shakeout in financials. Both of these companies have posted stock price gains over the past five days, one month, and year-to-date, which is impressive given the failure of both small and large banks in recent times. Both companies should benefit from a decline in the number of regional banks and M&A activity among the survivors.