The restructuring of three series of variable-rate demand bonds totaling $500 million by New York’s Triborough Bridge and Tunnel Authority is a credit-positive because it eliminates the risk of failed remarketings related to the credit of failed Dexia Credit Local, Moody’s Investors Service said in a report.
The VRDBs have been substituted and restructured into nine subseries of bonds supported by letters of credit from the California Public Employees Retirement System, the California State Teachers Retirement System and US Bank.
The TBTA, which Moody’s rates Aa2 with a negative outlook, has an additional $800 million of VRDBs supported by a consortium of banks.
Moody’s added that “lingering uncertainty about the New York City regional economy continue to weigh on TBTA’s credit outlook, notwithstanding growing revenues and stronger-than-budgeted debt service coverage in [fiscal] 2011.”
Its negative outlook also reflects increased budgetary stress at the agency’s parent, the state’s Metropolitan Transportation Authority, the rating agency added.