MEMORANDUM
TO:
MDTA Board
FROM:
Deputy Director Finance Allen Garman Debt Policy – Recommended Changes
SUBJECT:
DATE:
June 25, 2026
PURPOSE OF MEMORANDUM To request the Maryland Transportation Authority (MDTA) Board’s approval of the amended Debt Policy to update the legislatively set bonding limit to $5 billion and revise the minimum Unrestricted Cash 1 target to equal the Operating Budget. This item was recommended for approval by the Finance and Administration Committee on June 11, 2026. KEY POINTS Bonding Limit (Bond Cap) The MDTA bonding limit was increased to $5 billion from $4 billion during the 2026 legislative session and becomes effective July 1, 2026. Unrestricted Cash (Liquidity Reserve) The MDTA’s Unrestricted Cash target has not been raised since 2023 but should be upwardly adjusted intermittently or periodically for growth in the agency and inflation. Increased cash reserve is prudent and necessitated by rating agency metrics for Toll Sector entities in the double-A ratings category. The highest credit ratings in the double-A ratings category ensure bond market access at the lowest possible financing rates. Low financing rates support some combination of larger capital programs and lower required toll rates. The cost of maintaining a larger cash reserve is less than the long-term costs associated with financing as a lower rated borrower.
1 Unrestricted Cash – unrestricted cash and investments excludes Bond Proceeds and funds reserved for Debt Service.
2310 Broening Highway • Baltimore, MD 21224 • mdta@mdta.maryland.gov • 410.537.1000 • 711 (MD Relay) • mdta.maryland.gov • DriveEzMD.com
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