Moody's Investors Service said it has upgraded to Aa3 from A1 the ratings on the Metropolitan Atlanta Rapid Transit Authority's (MARTA) $1.7 billion of outstanding third indenture sales tax revenue bonds.
Concurrently, Moody's assigned a Aa2 rating to MARTA's $95.6 million variable rate sales tax revenue bonds second indenture Series 2000A in conjunction with the remarketing of the bonds in SIFMA index rate mode, and affirmed the Aa2 ratings assigned to $206 million of outstanding first and second indenture bonds. The outlook is stable.
The third indenture upgrade to Aa3 reflects restructuring of a formerly outsized variable rate debt and swap portfolio; growth in pledged revenues after multiple years of contraction; improvement in MARTA's cash position; a relatively low additional bonds test mitigated by sufficient debt service coverage; and easing pressure on the system's operations evidenced by its $9 million fiscal 2013 budgetary surplus.
The affirmation of the first and second indenture Aa2 ratings reflects the fact that both liens are closed to additional issuance except refundings; the gross pledge of a 1% sales tax in a broad metropolitan area; strong coverage of peak debt service; and sound legal provisions including a trustee intercept of sales tax receipts.
