INSIDE DRPA & PATCO:
Wall Street Recognizes Our Operational & Financial Strength
DRPA’s solid metrics in recent fiscal years and management’s tight control over costs boost credit rating
“DRPA has focused over the last few years on improving governance and management practices, focusing on core operations and successfully eliminating outstanding variable debt and swaps from its debt profile at the end of 2018. Some of the more recent management initiatives include the upgrade of SAP Enterprise Resource Planning (ERP) System to SAP HANA, the development of an asset management system and improved focus on maintenance, and the creation of a new department focused on strategic initiatives.”
-Moody's Investor Service
On February 4, Moody's Investor Service (Moody's) upgraded all of the DRPA revenue and port district project (PDP) bonds from A2 to A1. The Authority is extremely proud and excited about this recognition, as this is another important external validation of all the hard work performed by our Board, our staff, and our Citizen’s Advisory Committee (CAC) who have worked with the community and other stakeholders over the past decade to improve our finances. We’ve contained costs, restructured our debt and eliminated our swap exposure, invested in maintenance and capital projects, and more recently, in technology to support our strategic vision and mission. As a result, the Authority is at its strongest level in over 20 years.
Our financial fundamentals and results are very strong – and they have been for several years. What’s different this time is Moody’s view of DRPA/PATCO management, including the Board and staff.
In addition, Moody’s cited the following strengths supporting the rationale for the upgrade, including:
- Very strong liquidity; good cost control;
- Solid historical financial metrics;
- A manageable 5-year capital program ($810 million);
- No plan for toll increases or any new bond debt in the immediate future; and
- Positive changes in our debt structure, especially the elimination of variable rate debt and the interest rate swaps (December 2018).
While Moody’s did cite some specific “credit challenges,” we are confident our strategic focus will help us to maintain these new ratings. We believe that including the “Days Cash Outstanding” metric in the financial summary reported monthly to the Board (as suggested by the Board) will be important in our approach to monitoring and responding to the credit challenges.
The collaboration among our Board, staff and the CAC has been instrumental in our achieving this important milestone in our journey toward financial and operational excellence.
To view the Moody's Investor Service Press Release, click here.
To view the full Moody's Investor Service Credit Opinion, click here.
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