S&P: Arizona Transportation Board GAN Rating Raised To 'AA+' On Excellent Current And Projected Coverage, Despite Debt Plans
"The rating reflects our view of the excellent pro forma coverage of maximum annual debt service, even with planned additional debt, and of the back-up pledge on the GANs," said S&P Global Ratings credit analyst Mary Ellen Wriedt.
More specifically, the rating reflects our view of the following credit strengths:
The Arizona Department of Transportation's (ADOT) access to certain nonfederal funds if federal aid revenues are insufficient to cover debt service; The robust pro forma coverage of postrefunding maximum annual debt service provided by actual federal receipts (42x) and obligation authority (38x) in federal fiscal 2015, mitigating risk of a possible reduction in federal funding in the future;ADOT's history of maximizing its share of federal Title 23 federal aid transportation grants, including receiving additional obligation authority that the Federal Highway Administration redistributed from other states; and ADOT's effective management of the reimbursement process. The board has approximately $142 million in existing federal grant-secured GANs with a final maturity in fiscal 2026. The board is planning on issuing approximately $175 million in future additional debt.