MDTA BOARD INFORMATIONAL ITEM Rate Covenant Coverage Projections April 30, 2025
PURPOSE To review the projected fiscal year 2025 Rate Covenant compliance based on the most recent available toll revenue data, other revenue estimates, and budgeted expenditures. FORECAST ASSUMPTIONS Projected fiscal 2025 Rate Covenant coverage is based on forecasted net operating revenue and refinements as a function of realized traffic and revenues during the fiscal year. FY 2024 PROJECTION OF RATE COVENANT COMPLIANCE Rate Covenant compliance is estimated at 2.3 times coverage for fiscal 2025 versus the legal mandate of 1.0 times (based on 1.20 times coverage for debt service and 100% of the M&O budgeted deposits). The M&O account began the fiscal year at the reserve level target of $50 million, therefore no transfers have been budgeted. Fiscal 2025 debt service coverage is estimated at 2.9 times versus the 2.0 times coverage goal. Fiscal 2025 debt service of $144.5 million is projected to rise to $237.6 million at the end of the six-year CTP period in fiscal 2030. The attached chart shows that for fiscal 2025 the MDTA can withstand a decline in revenues of $225.2 million or conversely an increase in expenditures of that amount, and still meet the legal Rate Covenant requirement. The chart shows the Cushion on row C as the difference between Net Revenues on row A and the Legal Requirement on row B. ATTACHMENT
Rate Covenant FY 2025 - Projected Yaw Berkoh, Debt Administrator
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