The Maryland Department of Transportation expects to competitively sell $110 million of revenue transportation bonds on Wednesday.
The bonds are rated AAA by Standard & Poor’s, AA by Fitch Ratings, and Aa2 by Moody’s Investors Service. They will be backed by income, fuel, and title taxes, and other revenue if taxes prove insufficient. The bonds are not backed by the faith and credit of Maryland. Maturities range from three to 15 years.
The bonds will fund MDOT’s consolidated program — a plan to fund highway, rail, airport and seaport needs through fiscal 2014. The program has a $1.6 billion budget for fiscal 2009 and $1.6 billion of bonds outstanding, including the current sale. The General Assembly must pass the program’s annual budget.
The ratings reflect broad tax support and historically strong revenue growth, the agencies said. That growth slowed in fiscal 2008, but revenues covered maximum annual debt services 2.5 times for the year and revenues are expected to be flat through fiscal 2010, Fitch said.
“The rating reflects what we view as Maryland’s diverse, broad-based economy, which has historically outperformed the national economy but has been affected by the national recession,” said S&P analyst Richard Marino.
Kutak Rock LLP is bond counsel for the deal and Public Financial Managment Inc. is financial adviser.