S&P Upgrades METRO Bonds Rating
September 12, 2013
Standard & Poor's (S&P) Ratings Services has raised its rating on METRO’s sales tax bonds and contractual obligations one notch to 'AA+' from 'AA' and the outlook is ‘stable’. The upgrade, notes S&P, reflects METRO’s recent and projected sales tax revenue growth and formalization of a five-year financial forecast and capital improvement program (CIP).
At the same time the S&P raised its rating on METRO’s certificates of participation (COPs) one notch to 'AA' from 'AA-'. The outlook is also ‘stable.'
The ratings, according to S&P, reflect its opinion of:
- METRO management’s recent formalization of a five-year financial forecast and five-year capital improvement program (CIP)
- The ‘stable’ outlook reflects S&P expectation that management will likely sustain liquidity in excess of its target (maintaining at least 15 percent of expenditures)
- METRO’s strong liquidity and ability to reduce expenditures, as needed
- METRO’s fiscal 2012 pledged sales tax revenue (providing 7.42x debt service coverage (DSC) of the sales tax)
- Bonds’ and contractual obligations' maximum annual debt service (MADS)
- METRO’s 2x MADS additional bonds test with plans to issue additional contractual obligations over the next few years
- Harris County's deep and diverse economy
METRO Board Chairman Gilbert Garcia said, “The Board and staff are very pleased to see this upgrade which reflects confidence in our financial position and our management decisions. METRO will continue to make decisions that provide the best benefit to the riders, and the tax payers, of this region.”
The Metropolitan Transit Authority of Harris County (METRO) is the region’s largest public transit provider, offering safe, reliable and affordable transportation services about 370,000 times per day. Besides operating more than 1,200 buses, METRO is currently expanding its 7.5-mile light-rail line (Red Line), with three new lines under construction. METRO’s services also include: STAR Vanpool, METROLift, HOV lanes, HOT lanes, Bikes-on-Buses/Trains program, Park & Ride and road improvement projects.