Infrastructure and Project Finance
Moody's Ratings
Credit challenges » Maintenance of strong financial metrics is highly reliant on toll revenue increases from traffic growth or from active management from the authority, by increasing toll rates or making other adjustments to preserve its financial position » Significant capital program (2025-2030) sized at $5.1 billion with approximately $2.0 billion of additional debt by 2030 » Liquidity levels to decline to $400 million which is lower than the historically strong level of about $600 million over the past five years, as the large capital improvement program is funded with about 28% pay-go funds over the 2025-2030 period. Debt service reserves funded with surety policies further reduces liquidity. » Some remaining uncertainty regarding Francis Scott Key Bridge replacement project's total costs and timeline, even though funding is expected to come 100% from the federal government » The indenture allows for funds to flow out of the system to the Maryland Department of Transportation (MDOT) when authorized by the authority. However, the authority has not made payments since 2007. Rating outlook The negative outlook reflects the financial metrics expected to narrow as MDTA moves forward with its capital improvement program coupled with remaining uncertainty around the Key Bridge’s replacement project, though at lower levels now given the definition of 100% funding by the federal government. Factors that could lead to an upgrade » Continued significant and sustained higher-than-projected traffic levels » Successful completion of planned capital projects » Toll revenues that support adjusted debt to operating revenues of less than 3.0x while maintaining strong liquidity could exert upward pressure on the rating » Clearer path on Key Bridge’s replacement project with minor impact to MDTA’s credit profile could stabilize the outlook Factors that could lead to a downgrade » Lower traffic and revenue levels than assumed in the authority's base case forecast » Significantly higher debt financing of the capital program than currently envisioned » A sustained decline in the DSCR below 2.0x » A sustained increase in leverage resulting in adjusted debt to operating revenue above 4.5x » Liquidity below 400 days cash on hand » Prolonged uncertainty on bridge replacement project and/or replacement project resulting in further weakening of financial metrics without any mechanism to offset it » Transfers of funds out of the system to MDOT that put pressure on toll rates and/or on financial metrics
This publication does not announce a credit rating action. For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings.moodys.com for the most updated credit rating action information and rating history.
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22 May 2025
Maryland Trans. Auth. - Trans. Facilities: Update to credit analysis
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