NEW YORK - Moody's Investors Service said it has downgraded the rating on the Miami-Dade Transit, Fla.'s (MDT) senior sales surtax revenue bonds to A1 from Aa3 and revised the outlook to stable from negative.
Concurrently, Moody's has assigned an A1 rating and stable outlook to the senior sales surtax revenue bonds, Series 2012. Proceeds of the bonds will be used to fund various transit and public works projects, refund outstanding bond anticipation notes and fund a debt service reserve fund.
Following this issuance, the MDT will have $1.5 billion in senior sales surtax bonds outstanding. The outlook has been revised to stable.
The rating downgrade to A1 from Aa3 reflects Miami-Dade Transit's highly leveraged senior sales surtax revenues, sizeable capital plans, declining debt service coverage, and narrow financial operations with increased reliance on general fund support from Miami-Dade County (GO bonds rated Aa2/negative outlook).
The A1 rating incorporates the strength of the gross ½ cent county-wide sales tax pledge (on transactions up to $5,000), recent improving collection trends, and adequate legal covenants including an additional bonds test (ABT) of 1.5 times.