A recent upgrade from Moody's Investors Service could mean interest savings for New York's Metropolitan Transportation Authority, an official said.
The authority this week intends to refund about $500 million in transportation revenue bonds - its workhorse credit - with a similar refunding expected after Labor Day, finance manager Patrick McCoy told the MTA board's finance committee on Monday.
On July 10, Moody's elevated that credit to A1 from A2, citing improved trends in the authority's operating environment over recent years. Standard & Poor's and Fitch Ratings assign AA-minus and A ratings, respectively. Kroll Bond Rating Agency rates the bonds AA-plus.
This week's sale will be the first after the upgrade for the MTA, one of the largest municipal issuers with roughly $35 billion in debt.
"We'd like to think that there'll be some benefit," McCoy told board member Andrew Albert. "We'll try to get a sense of that. A one-notch improvement is a good thing. Whether or not we can quantify that is a hard question but we'll do our best to look at the data and see what it says."
Morgan Stanley and Siebert Brandford Shank & Co. LLC will lead the transaction along with co-senior managers Bank of America Merrill Lynch, JPMorgan and Ramirez & Co. Orrick, Herrington & Sutcliffe LPP and Bryant Rabbino LLP are co-bond counsel. Public Financial Management Inc. and Hawkins Delafield & Wood LLP will be financial advisor and special disclosure counsel, respectively.
Next month, the MTA expects to effect a mandatory tender and remarket $122.6 million of Series 2001C Triborough Bridge and Tunnel Authority general resolution bonds, and $175 million of Subseries 2005E-1 and 2005-E2 transportation revenue bonds, due to an upcoming expiration of enhancing letters of credit.
The MTA also gave preliminary approval Monday to two contracts totaling $205.8 million to Siemens Industry Inc. and Thales Transport & Security for the installation of a communications-based train control signaling system on the Queens Boulevard subway line, one of New York City Transit's busiest.
Full board approval is expected Wednesday.
The CBTC signaling system, which the authority operates on the Canarsie L line and is installing on the Flushing 7 line, enables the MTA to deal with overcrowding and record subway ridership by operating subway trains more closely together.
Roughly 6 million riders use the city's subways daily.
