Fitch Ratings recently upgraded the debt of Illinois’ Regional Transportation Authority to AA as part of its review of tax-supported debt enterprises with an increased focus on operating risk and other factors.
The action affects $1.9 billion of general obligation bonds. The outlook remains negative, reflecting “the continuing financial pressure both on operations and capital spending due to the delinquent state payments and the state’s persistent financial challenges,” Fitch wrote.
The credit benefits from improving sales tax collections, which are pledged to debt repayment and the essential transit services provided by the RTA’s service boards with 2.6 million riders daily.
Debt service coverage is expected to remain sufficient at 1.3 times.
“The bond rating upgrade has the positive effect of strengthening our borrowing capability and helps with getting our bills paid more expediently,” RTA executive director Joe Costello said in a statement. “While the economic outlook remains bleak, this favorable news puts our transit system on more solid financial footing.”