Moody's Downgrades New York Thruway Authority to A2

Moody's Investors Service downgraded the New York Thruway Authority's senior lien bonds to A2 from A1 in an action that affects $3.9 billion in debt.

Moody's has a stable outlook on the A2 rating.

In explaining the Nov. 8 downgrade, Moody's senior vice president Maria Matesanz and managing director Chee Mee Hu pointed to several factors.

The downgrade is due partly to the fact that toll increases on the planned new Tappan Zee Bridge will be necessary. These have yet to be decided upon, the analysts note.

The authority may find it difficult to simultaneously manage the large bridge construction project and maintain its other assets. The bridge contractor may also fail to complete the bridge on schedule and on budget, they said.

On the other hand, the analysts note that the authority has a vital transportation role in the region.

The authority has enjoyed fairly steady financial performance in recent years.

New York has assumed some of the authority's recurring costs.

Finally, the authority has continuously made an effort to contain costs and promises to maintain debt service for senior bonds at above 1.55 times.

On Oct. 29 Standard & Poor's downgraded the authority's senior bonds to A from A-plus.

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Transportation industry New York
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