In the wake of "superstorm" Sandy, Standard & Poor's Ratings Services is monitoring credits from Maine to Florida that the weather may have affected.

Assuming a relatively short-term service interruption and that affected credits have property and even business interruption insurance and/or Federal Emergency Management Agency eligible reimbursements, the agency currently does not expect to see deterioration in investment-grade credits.

However, should the impact of the storm be longer term or wind and flooding damage worsen, then it could revise ratings as it obtains better information. Should the revenue-generating capacity of an obligor likely be impaired materially for an extended period, credit quality could be pressured.

While at least 15 states and the District of Columbia have seen and will continue to see direct damage throughout at least the next several days, these are some of the largest obligors or other particular credits that are or could be affected by the storm. Ratings for other U.S. public finance infrastructure credits not highlighted below could also be affected as better information is gathered in the next few weeks.


Governor Andrew Cuomo ordered a shutdown of commuter rail, subway, and bus service on Oct. 28. The Long Island Rail Road and the Metro-North Railroad were providing limited service on part of their respective networks, and limited subway service began on several routes supplemented by bus service from Brooklyn to Manhattan. All of the bridges operated by the agency are open to traffic. The Hugh L. Carey and Queens Midtown Tunnels, however, remain closed after suffering extensive flooding. Work is underway to regain power, clear debris along the right of way, and make repairs. The agency reports that damage was significant in downtown Manhattan where several subway lines converge. The agency reports that it is still too early to say how long it will take to restore the system to full service.


John F. Kennedy (JFK) International and Newark Liberty International airports resumed operations Wednesday, providing limited service, while LaGuardia and Teterboro airports remained closed. Stewart International airport is open, running limited operations. The George Washington Bridge, Goethals Bridge, Bayonne Bridge, and Outerbridge Crossing are open. The Lincoln Tunnel is open while the Holland Tunnel remains closed. PATH train service is suspended until further notice. All public and private bus service is suspended though some bus carriers may resume some service. The agency port facilities remain closed. It has been reported that Sandy's storm surge flooded the basement levels of the World Trade Center site with 15 to 30 feet of water.


As it did in anticipation of Hurricane Irene in 2011, the Department of Environmental Protection (which operates the system) released water from its upstream reservoirs prior to Sandy's arrival, allowing for the precipitation and runoff to be safely captured without pressuring any flood control infrastructure. Treatment plants located in New York City have some power from the grid and also generally have some limited backup on-site power generation. There are no plants located in lower Manhattan, where much of the worst flooding has occurred.

SOUTH JERSEY TRANSPORTATION AUTHORITY (senior debt: A-minus/stable; subordinate debt: BBB/ stable)

Parts of the Atlantic City Expressway remain closed while the Atlantic City International airport has resumed operations.


A recent news report mentioned that "a section of the New Jersey Turnpike was covered by a seven-foot pile of debris and two dozen railcars." S&P understands that toll collections resumed after not being collected for two days.


As of Oct. 30, 2012, SEPTA has much of its core rail and bus service restored, but it may be another day or two before regional rail is restored due to the sheer number of downed trees.


While the storm's direct damage to the utility was not severe, lingering high rainfall upstream could still lead to moderate to severe flooding along the Potomac and its tributaries in the coming days.

There were also a number of nuclear power plants in Sandy's path. This includes:

--Crystal River 3 (Florida), in which Orlando Utilities Commission, Gainesville Regional Utilities, and Seminole Electric Cooperative all have a small ownership interest, has been offline since 2009 for repairs.

--Millstone No. 3 (Connecticut), in which Massachusetts Municipal Wholesale Electric Co. has a 4.8% interest, reduced its output to 75% of capacity in anticipation of high intake water levels due to the hurricane.

--VC Summer (South Carolina), in which Santee Cooper has a one-third interest, began a planned refueling outage on Oct. 12, 2012, prior to the storm.

Standard & Poor's does not expect revenue bond debt service payments due on Nov. 1, 2012, to be missed due to the storms.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.