DelDOT issues new bonds; maintains high credit rating
The Transportation System Senior Revenue Bonds, 2008 Series B were issued to provide funds for the capital transportation program. Barclays Capital Inc. was the winning bidder among the four underwriting syndicates that participated in the bidding. The True Interest Cost was 4.72 percent for the sale. The bonds were affirmed as AA+ by Standard & Poor’s, and Aa3 rating by Moody’s. Both rating agencies also reported a “stable” outlook for the transportation system revenue bonds.
“This is especially good news for Delaware given the current state of the economy,” Minner said. “The low interest rate and strong bond ratings will enable DelDOT to borrow for less, saving the state money during tight financial times.” Department Secretary Carolann Wicks stated, “This reaffirms that DelDOT has a sound and well-managed financial plan. Still, we have implemented a variety of new and improved internal measures that will ensure our ratings remain solid and our bond sales remain significant.” Credit characteristics stated by Standard & Poor’s that support the ‘AA+’ rating include the following:
• The state’s strong commitment to the transportation program
• The authority’s diverse pledged revenue sources
• The authority’s strong historical and projected debt service coverage
• Rapid amortization of new and existing senior- and junior-lien debt
• A well-thought-out capital transportation plan, with a policy to fund 50 percent of capital projects on a pay-as-you-go basis.
According to the Ratings Report issued by Moody’s, the high-quality credit rating is based on the strength and diversity of pledged state transportation revenues, a limit on the issuance of additional debt against these resources, and adequate coverage of debt service, the current issue, and the anticipated parity bonds the authority expects to issue in the next six years.
