N.J. Turnpike Gets Rating Boost to A-plus From S&P

Standard & Poor’s last week raised $4.8 billion of outstanding New Jersey Turnpike Authority revenue bonds to A-plus from A. The outlook is stable.

The rating change comes as the authority plans to sell today $1.75 billion of new-money debt, including $1.25 billion of taxable Build America Bonds and $500 million of tax-exempt debt.

Morgan Stanley is senior manager on the deal. NW Financial is the financial adviser and Wilentz, Goldman & Spitzer PA is bond counsel.

Dennis Enright, a principal at NW Financial said the upgrade could help the authority as it heads to the market today.

“I think it will make it even more attractive to buyers to know that we’re an improving credit,” Enright said.

Standard & Poor’s changed NJTA’s outlook to positive from stable in late December after the authority implemented a toll hike on Dec. 1. Tolls will increase again in 2012 on the New Jersey Turnpike and the Garden State Parkway. The additional revenue will help finance a 10-year, $7 billion capital program.

The authority anticipates receiving $949.6 million and $988.6 million of revenue from the two toll roads in 2009 and 2010, respectively, according to the POS. The NJTA expects that amount to increase to $1.47 billion in 2012.

“The ratings upgrade is based on the significantly increased revenues from toll increases that were approved in October 2008,” said Standard & Poor’s analyst Laura Macdonald in a press release.

Fitch Ratings and Moody’s Investors Service rate the Series 2009E and Series 2009F bonds A and A3, respectively, both with a stable outlook.

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Transportation industry
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