The Triborough Bridge and Tunnel Authority, which finances seven New York City bridges and tunnels, expects to sell $250 million of variable-rate bonds this week to fund a portion of the agency's 2000-2004 capital program.
Citigroup Global Markets Inc. will serve as senior manager on the sale. The variable-rate bonds will be supported by a standby bond purchase agreement provided by Dexia Credit Local.
Rating agencies assigned strong ratings to the bonds based on the critical service the TBTA's bridges and tunnels provide and to recent toll increases by the state Metropolitan Transportation Authority, which have boosted revenues. The TBTA is governed by the MTA.
Despite the Sept. 11 terrorist attacks and a two-year downturn in New York City's economy, TBTA finances "have remained strong and stable," Fitch Ratings said. After falling 2.7% in 2001, the authority's revenues recovered in 2002, growing by 2%, to $933.1 million.
Due to the MTA's May toll increase and lower debt service costs associated with a massive MTA debt restructuring last year, debt service coverage is expected to rise to three times from 1.89 times. Although the MTA, which could face a $2.1 billion deficit by 2007, is subsidized by the TBTA, rating agencies noted that the bridge and tunnel bonds are senior to the cash transfer.
Moody's Investors Service assigned a Aa3/VMIG-1 rating to the bonds. Fitch assigned a AA/F1-plus rating, while Standard & Poor's rated the debt AA-minus/A-1-plus.
