DALLAS - Moody's Investors Service revised its outlook on the Harris County Toll Road Authority's Aa3 rating to positive, signaling a possible upgrade in the future for the Houston-area agency.
The revision is based on strong traffic and revenue growth in a growing economy and toll rate increases that provide strong debt service coverage, said analyst Maria Matesanz.
"Liquidity remains strong despite annual transfers of approximately $120 million to the county's mobility fund for road projects that are not tolled," Matesanz noted. "We note as a credit positive management's stated goal of keeping leverage below five times gross operating revenues."
HCTRA has no plans to issue any debt in the coming year, Matesanz said, and on-going capital program projects are expected to be funded primarily with "sizeable" excess cash flow.
The toll authority has about $1.93 billion of senior-lien debt outstanding, according to Moody's.
Standard & Poor's rates HCTRA's senior-lien bonds AA-minus. Fitch Ratings pegs the debt at AA. Their outlooks are stable.
An updated traffic and revenue forecast for the toll system is expected in October.
"This combined with the planned toll rate increase in September as well as another year of operations will help inform our decision to move up on the rating," Matesanz said.
