The Massachusetts Turnpike Authority is looking for nearly $15 million to keep debt service coverage on $2.2 billion of debt at levels stipulated in bond documents through fiscal 2009.
The authority’s board last week postponed voting on a toll hike. Those additional revenues would have helped MassPike meet debt service costs. Debt service coverage cannot fall below 1.15 times on $2.2 billion of Metropolitan Highway System bonds.
Mary Connaughton, a MassPike board member, said the panel would like to see details of Gov. Deval Patrick’s transportation reform proposal before raising tolls. The plan would end MassPike and fold different portions of the authority into other state transportation agencies.
In addition, some lawmakers have been calling for an increase to the state’s 23.5-cent gas tax to help finance transportation needs, and Senate leaders promised to file their reform proposal next month.
“I think between looking at further cost reforms and the Turnpike Authority looking into some of its reserves, [MassPike] can meet that shortfall, but certainly not for the long term,” Connaughton said. “Long enough to see what comes out of the legislature and the governor’s office — and again, if nothing good comes out, a toll hike is a certainty.”
Earlier this month, the state’s general obligation pledge expired on MassPike’s five floating-to-fixed-rate swaps with UBS Securities LLC totaling $800 million. Just days before the GO pledge expired, UBS informed the authority that it owed the bank nearly $400 million in a termination event payment. Days later, UBS withdrew that claim.
Connaughton said MassPike officials did not discuss asking the state to renew its GO pledge or other issues with the UBS swaps.
“That didn’t come up,” she said. “My understanding is that they’re working to correct that.”
