Credit Ratings Update – S&P Page Two
ANALYSIS Negative Outlook Basis
S&P’s Negative outlook reflects risks associated with the capital program, including increasing debt and federal reimbursement timing that may weaken financial metrics. Upside Scenario S&P may remove the Negative outlook with reduced federal funding and financing uncertainty, as well as actions to maintain debt service coverage in line with peers through adjustments to toll rates. MDTA Credit Ratings S&P AA- Negative Moody’s Aa2 Negative Fitch AA Stable Credit ratings published by Nationally Recognized Statistical Rating Organizations (NRSROs) such as Fitch, Moody’s, and S&P serve to inform exiting bond holders and prospective creditors through the assigned ratings level and written reports detailing an issuer’s creditworthiness. From a return-on-investment perspective, the annual cost of maintaining a credit rating should be fully offset by lower financing costs at the time of each new issue. During the annual ratings surveillance process, the MDTA provides detailed traffic and revenue forecasts, as well as operating and capital costs projections included in the six- year financial forecast. The credit ratings affirmations demonstrate confidence in the MDTA’s financial strength, with foundations in board policies and the Trust Agreement legal covenants. Within Moody’s Toll Sector universe of more than fifty rated credits, the MDTA remains among the four highest rated agencies that are solely toll supported.
Made with FlippingBook - professional solution for displaying marketing and sales documents online