14 Aug AiroAV Malware Assert: Delaware Transportation Authority — Moody’s assigns Aa1 to
Rating Action: Moody’s assigns Aa1 to the Delaware Transportation Authority’s Series 2020 transportation system senior revenue bonds; outlook stable
Global Credit Research – 14 Aug 2020
New York, August 14, 2020 — Moody’s Investors Service has assigned a Aa1 rating to the Delaware Transportation Authority’s approximately $219 million Transportation System Senior Revenue Bonds, Series 2020. The authority anticipates pricing the bonds the week of August 24. The outlook is stable.
The Aa1 reflects the strength of the base from which the state collects pledged revenue, notwithstanding weakened revenue performance in fiscal 2020 due to the coronavirus pandemic. The rating incorporates an expectation of healthy debt service coverage going forward, which is supported by a declining debt service schedule even with the new borrowing. The rating further considers the role of the State of Delaware (Aaa stable) in dedicating certain revenue to the Transportation Trust Fund, into which the state deposits pledged revenue and from which the authority makes bond payments.
We regard the coronavirus outbreak as a social risk under our ESG framework, given the substantial implications for public health and safety. The coronavirus crisis is not a key driver for this rating action. We do not see any material immediate credit risks for the authority. However, the situation surrounding coronavirus is rapidly evolving and the longer term impact will depend on both the severity and duration of the crisis. If our view of the credit quality of the authority changes, we will update the rating and/or outlook at that time.
The stable outlook on the transportation bonds incorporates the stable outlook assigned to the State of Delaware as well as an expectation of stability in pledged revenue and the maintenance of strong debt service coverage on all bonds of the authority.
FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING
– Greater legal constraints on leveraging pledged revenue
FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING
– Materially weakened trend in pledged revenue collection
– Significant drop in debt service coverage
– A downgrade of the state’s general obligation rating
The Series 2020 bonds and outstanding transportation system senior revenue bonds are secured by a senior claim on certain revenue deposited into the State of Delaware’s Transportation Trust Fund. The state dedicates certain taxes and fees to the trust fund, from which the authority pays the bonds. The bonds are also secured by a debt service reserve.
USE OF PROCEEDS
The authority will use bond proceeds to finance capital improvements and refund certain outstanding senior revenue bonds for anticipated debt service cost savings.
The Delaware Transportation Authority is a component of the Delaware Department of Transportation. The authority was established in state statute by the General Assembly of Delaware to implement plans for the creation of a unified transportation system in the state.
Delaware is the sixth-smallest state in the US, based on its estimated population of just under 975,000. The state’s estimated 2019 gross domestic product of $75.4 billion, ranks 41st among states. Delaware’s personal income per capita is $54,300, or roughly 96% of the national level.
The principal methodology used in this rating was US Public Finance Special Tax Methodology published in July 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1077147. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.
For further specification of Moody’s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody’s Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.
For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.
The rating has been disclosed to the rated entity or its designated agent (s) and issued with no amendment resulting from that disclosure.
This rating is solicited. Please refer to Moody’s Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.
Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.
Moody’s general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1133569.
The Global Scale Credit Rating on this Credit Rating Announcement was…