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Standard & Poor's Raises DRPA Bond Ratings
Moody’s Affirms Current Ratings; Cites “Strong Financial Management” and Tight Budgets
CAMDEN, N.J. – Citing sound financial management, Standard & Poor’s Rating Services yesterday raised its rating on Delaware River Port Authority revenue bonds to “A” from “A-.”
Standard & Poor’s also assigned its long-term “A” rating to the DRPA series 2013, $486.3 million revenue bonds and declared a “stable” outlook for DRPA securitized debt.
"The upgrade reflects our view of the authority's strong projected debt service coverage levels and history of maintaining healthy liquidity levels, despite declines in traffic," said credit analyst Anita Pancholy in a Standard and Poor’s news release issued yesterday. DRPA bridge traffic has declined 13 percent since 2007.
The “stable” outlook reflected Standard & Poor’s expectation that “the authority will continue to operate at or above projected financial metrics, including the maintenance of stable debt service coverage and strong liquidity levels,” the release said.
In addition, Standard& Poor’s raised the ratings on the DRPA’s subordinate Port Development Bonds from “BBB-“ to “BBB” and affirmed its “AAA/A-1” and “AAA/A-1+” ratings on various DRPA series 2008 and 2010 bonds.
“We have worked hard to reduce debt costs, manage operating costs, take advantage of record low interest rates and preserve institutional liquidity,” said DRPA Chief Financial Officer John Hanson. “We’re pleased that the rating agencies have noticed.”
The agency listed four credit strengths that supported its decision to improve the DRPA bond ratings:
- The central place the DRPA’s bridges occupy in the regional transportation network,
- Financial management policies that have increased cash flow,
- The DRPA’s long history of stable transaction and revenue growth and
- Multiple bridges serving as toll-revenue sources, with no one bridge accounting for more than 40 percent of revenue.
Late last week, Moody’s Investors Service affirmed the DRPA’s “A3” bond rating and declared a “stable” outlook. In a Nov. 22 news release, Moody’s said the rating and outlook were supported by several financial strengths, including:
- “Strong financial management, with operating results under budget by 6.3 percent since 2003,”
- The Board of Commissioners’ mandate “to exit economic development and focus on core infrastructure assets” and a
- “Recent focus on active debt management.”
The DRPA has saved $4 million annually since last year by restructuring lines of credit. The authority also has reduced leverage by redeeming $96 million in debt.
The Delaware River Port Authority is a regional transportation agency that connects millions of people and businesses in Pennsylvania and New Jersey. The DRPA owns and operates the PATCO commuter rail line and the Benjamin Franklin, Walt Whitman, Commodore Barry and Betsy Ross toll bridges. The DRPA also owns the RiverLink Ferry. For more information, please visit our website: www.drpa.org or follow us on Twitter: @DRPA_PaandNJ.
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