An upgrade by Standard & Poor's to the primary credit of New York's Metropolitan Transportation Authority — transportation revenue bonds — was welcome news to MTA finance officials.
"It was a very good report and something that took a great deal of work to get S&P to look at us," said finance manager Patrick McCoy said at the Feb. 24 meeting of the MTA board's finance committee.
On Feb. 18, S&P raised the long-term rating of the transportation revenue bonds to A-plus from A, citing criteria for mass transit enterprise ratings that it revised in December. The announcement came one day before the authority sold $400 million of Series 2014 TRBs to finance approved transit and commuter projects and refinance certain outstanding bonds.
"Most important is that we'll save money with the higher rating. It's a big deal for us," said finance committee chairman Andrew Saul.
Joint bookrunning senior managers Morgan Stanley and Siebert Brandford Shank led the transaction, together with co-senior manager Lebenthal & Co. Nixon Peabody was bond counsel and Public Financial Management Inc. was financial advisor.
S&P assigned a positive outlook, reflecting its view that the rating stands at least a one-third chance of a further upgrade if the MTA experiences modest year-over-year increases in ridership while maintaining a strong financial risk profile.
According to the year-end summary McCoy presented the full board last month, transportation revenue bonds amount to $19.1 billion, or 58.2% of the authority's portfolio.
Fitch Ratings and Moody's Investors Service rate the bonds A and A2, respectively.
