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Standard & Poor's Raises DRPA Bond Ratings
CAMDEN, N.J. – Citing sound fiscal policies, strong liquidity and high unrestricted cash/investment reserves, an affordable capital plan, and reduced risk in the Authority’s swap portfolio on April 21, 2016, Standard & Poor’s Rating Services raised its rating on the Delaware River Port Authority (DRPA) port district project bonds to ‘A-‘ from ‘BBB.’ In addition, S&P reaffirmed our current ratings on our revenue bond debt and for the second time in 3 years, increased the ratings on our subordinate debt from ‘BBB’ to ‘A-.’
Standard & Poor’s based the DRPA upgrade on the application of new ratings criteria (See “Assigning Issue Credit Ratings of Operating Entities” criteria, published May 20, 2015), which provides additional transparency related to the assignment of issue credit ratings on U.S. public finance debt instruments of operating entities.
It also affirmed its ‘A’ rating on the DRPA’s toll revenue bonds outstanding, affirming a stable outlook, largely a result of S&P’s assessment of the Authority’s traffic trends, good debt service coverage, and strong liquidity levels. Standard & Poor’s also affirmed an ‘A’ rating to DRPA’s series 2008 and 2010 variable-rate bonds that was based jointly on, “the credit quality of the obligor and that of the respective letter of credit provider.”
The report states the ratings on the revenue bonds reflect Standard & Poor’s view of the following credit strengths:
- The importance of the DRPA bridge system;
- Historically strong liquidity levels; and
- The Authority’s long history of stable transaction and revenue growth.
“This rating upgrade demonstrates our ongoing commitment to sound fiscal and operational practices and the diligence of our CEO, John T. Hanson and our CFO, Jim White to ensure the DRPA is run effectively and efficiently while delivering the services needed to meet and exceed the needs of the public whom we serve,” said DRPA Board Chairman Ryan N. Boyer. “I congratulate the work being done daily by DRPA staff to achieve this highly sought-after rating.”
“While ratings may not be front-and-center measurement tools in the eyes of the public, a raise in the ratings from Standard & Poor’s is of significant importance to the DRPA, our financial partners and our lenders, whom we rely upon to deliver the fiscal tools and support needed to keep our infrastructure in top-notch condition and our motorists and PATCO riders safe and comfortable,” said DPRA Vice Chair Jeff Nash. “These high ratings enable us to borrow money and repay loans at the most competitive rates,” he added.
“We couldn’t be more pleased with this rating increase report,” said John T. Hanson DRPA CEO. “This report spells out that Standard & Poor’s recognizes and commends the steps we have taken over the years to develop a superior financial position and improve our operational effectiveness and efficiency.”
The report concluded by stating, “The stable outlook reflects our assessment of the authority’s traffic trends, which we view as supporting its financial profile, and strong liquidity levels and good Debt Service Coverage (DSC).”
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