The Metropolitan Transportation Authority’s Triborough Bridge and Tunnel Authority in New York should be able to absorb revenue losses from facilities that closed due to Hurricane Sandy, Moody’s Investors Service said Thursday, though already low liquidity could be further reduced.
Moody's, which rates the Triborough bonds Aa3, said it will focus on assessing the authority's Sandy-related repair costs and how these costs will be funded as the authority awaits reimbursements from its insurers and the Federal Emergency Management Agency.
“Also we will evaluate the impact of these additional costs on debt service coverage ratios and liquidity,” the rating agency said in a statement.
“With debt service coverage ratios of 2.5 times for senior bonds and 1.9 times for all bonds in [fiscal] 2011, we estimate that operating revenues would have to fall by nearly 50% for a year to breach coverage covenants. For FY2012, DSCR is forecasted to be slightly lower at 2.4 for senior bonds and 1.8 for all bonds,” Moody’s said.
According to the rating agency, liquidity was fairly low at 226 days cash on hand in fiscal 2011, but cash flow is strong with 94% of revenue-generating facilities open as of Wednesday.
MTA Chairman Joseph Lhota said at a fare-and-toll-increase meeting Wednesday night in downtown Brooklyn that he expects 90% to 95% reimbursement from insurers and FEMA. The MTA operates New York City’s subway system, Long Island and Metro-North commuter railroads and several bridges and tunnels around the city.
The facilities that were closed include the Queens Midtown Tunnel and the Hugh Carey Tunnel (formerly Brooklyn Battery Tunnel), which, according to Moody’s together account for roughly 17% of operating revenues.
Combined with two other smaller bridges that were closed (Cross Bay Veterans Memorial Bridge and Marine Parkway-Gil Hodges Memorial Bridge, both of connect the battered Rockaways neighborhood in southern Queens) the closed facilities account for about 18.5% of total operating revenues. The two bridges closed during the storm are now open.
Queens Midtown, which accounts for 11% of revenues, will fully reopen at 6 a.m. Friday, Gov. Andrew Cuomo said at a Thursday afternoon news conference. The MTA is still working to re-open the Carey, which Moody’s said accounts for 6% of revenues.
Earlier this week, the Triborough priced a $129 million Series 2009A-1 conversion of mandatory put bond to fixed-rate bonds, with Loop Capital Markets the senior manager.
