Regional authorities that operate toll roads in central and northeast Texas received rating upgrades this week ahead of bond sales.
Moody's Ratings raised the Central Texas Regional Mobility Authority's senior lien revenue bond and Transportation Infrastructure Finance and Innovation Act subordinate lien bond ratings to A2 from A3. The subordinate lien revenue bond rating was lifted to A3 from Baa1. Moody's kept its positive outlook at the higher ratings.
The upgrade of
It added that the outlook remains positive because the recently opened 183A Phase III, as well as 183 North Mobility Project, which will open by the end of fiscal 2026, "will provide for a quick increase in revenue and reduction in leverage."
The authority said it plans to refund Series 2015A senior lien and Series 2016 senior and subordinate lien bonds in late October or early November through an underwriting team led by Wells Fargo Securities. It also intends to launch a tender offer for some taxable bonds issued in 2020 and 2021.
"The upgraded ratings demonstrate the growing recognition that Central Texas has a real need for transportation infrastructure and that the mobility authority is meeting that need effectively and efficiently with a fiscally sound approach," James Bass, the authority's executive director, said in a statement. "It is also a testament to the board's stewardship in guiding the agency toward responsible growth while addressing our region's mobility needs."
The North East Texas Regional Mobility Authority based in Tyler received one-notch upgrades from Moody's and S&P Global Ratings.
Moody's raised the ratings on nearly $121 million of senior lien revenue bonds to Baa1 and on $50.58 million of subordinate lien bonds to Baa2, with stable outlooks. The outstanding debt will be refunded in the authority's upcoming $183.5 million bond sale, according to the rating agency.
Moody's attributed the upgrades to improved clarity for the timing of a toll road extension project, requiring more than $300 million in additional debt, that is not expected to commence until the next decade.
"According to management, the project will only proceed if future traffic and revenue projections from the new segment indicate that it will be able to cover the new debt, which the data currently does not support," Moody's said. "The upgrade also took into account NET RMA's demonstrated revenue growth and the user base's price inelasticity, as evidenced by continued transaction growth despite a 12% toll rate increase at the start of 2025, signaling resilient demand and supporting the authority's overall credit profile."
S&P lifted the authority's senior lien rating to A from A-minus and subordinate lien rating to A-minus from BBB-plus, with stable outlooks.
"The upgrade reflects our view of the authority's demonstrated resilience through build-out of the system and track record of maintaining strong financial metrics, which we view as sustainable due to its biennial toll rate increases and no new-money debt plans," it said in a report.
The authority "appreciates these agencies recognizing the NET RMA's continued growth," Chairman Gary Halbrooks said in a statement.
