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Fitch Ratings Gives Stable Outlook Citing “Healthy Financial Metrics”
PORTLAND, Maine – Fitch Ratings has affirmed the Maine Turnpike Authority’s outstanding revenue bonds at ‘AA-’ with a stable outlook. Turnpike officials indicate the rating maintains the Maine Turnpike’s place among the highest rated toll roads nationwide.
The rating agency cited healthy financial metrics, a relatively low debt burden and a manageable capital program as key factors in its rating. Although no future toll increases are currently planned, the MTA’s continued ability to leverage additional capital with periodic toll increases in order to produce appropriate debt service coverage levels was identified as a factor to support the current rating. However, expanding financial assistance to the Maine Department of Transportation could negatively affect the Authority’s credit.
“Retaining such a high bond rating reflects strong confidence in the turnpike’s careful oversight and management of costs,” according to Turnpike Executive Director Peter Mills. The Turnpike’s operating budget for 2013 was significantly reduced by 11% and will be cut by 4% more for 2014 through various operating efficiencies, including a reduction in annual payroll costs of over $2 million, reflecting in large part the reduction of approximately 45 positions since 2011.
The rating applies to approximately $425.7 million of outstanding turnpike revenue bonds. Bond proceeds are used to finance necessary turnpike capital repairs and safety improvements, including the rehabilitation and replacement of numerous bridges and modifications to interchanges.
Last Tuesday, Fitch downgraded Maine’s $472 million in general obligation bonds and general resolution bonds. The Maine Turnpike Authority was created in 1941 by the state legislature as an independent state agency with the stipulation that turnpike debt does not constitute an obligation of the state. Tolls are the only source of revenue used by the Maine Turnpike Authority to maintain and operate the Turnpike as well as pay back bondholders who loan private capital to finance safety improvements, and major reconstruction projects. No federal or state tax dollars have ever been used on the Maine Turnpike.