New York State Thruway Sr Liens Downgraded to A2 by Moody's

Moody's Investors Service said it has downgraded to A2 from A1 the senior lien revenue bonds of the New York State Thruway Authority.

The outlook is stable.

The downgrade to A2 incorporates the expected issuance of a potentially significant amount of junior lien obligations (JIOs) to be issued under a new junior bond resolution that has been adopted by the NYSTA Board.

These new junior obligations will be issued to finance the replacement of the Tappan Zee Bridge, referred to as the New New York Bridge (NNYB) project.

The downgrade considers that future financial performance will rely to a much greater extent on as yet undetermined toll increases to support the bridge construction costs and that failure to adopt sufficient rate increases within the expected time horizon would pressure financial metrics.

Additional risks factored into the senior lien rating include the ability of NYSTA to manage the construction of a complex project while maintaining the condition of its very large asset base; the contractor's ability to deliver the NNYB project on schedule and within budget, particularly given the use of a unique floating crane that is being shipped from the West Coast.

For reprint and licensing requests for this article, click here.
MORE FROM BOND BUYER