Accelerated Bridge Program Receives Upgrade By Moody’s
Officials: Ratings Reflect Solid Financial Management and will Result in Millions in Savings
State officials today announced that the Commonwealth has received a rating upgrade from ‘Aa2’ to ‘Aa1’ from Moody’s Investor Services on its Federal Highway Grant Anticipation Notes (GANs) used to fund the state’s Accelerated Bridge Program (ABP). The upgrade reflects the strength of the revenue sources used to finance the notes, and along with Moody’s reaffirmation of its top rating for an upcoming related bond sale, is expected to lead to millions of dollars in saved borrowing costs.
“Once again, Massachusetts securities are being upgraded due to our strong financial outlook, which will result in millions of dollars of savings for the taxpayers,” said Treasurer Steven Grossman. “The Commonwealth’s Accelerated Bridge Program bonds and notes are among the strongest in the country, and we are delighted that Moody’s has recognized the work we have done on a sustained basis.”
“This is yet another positive result of Governor Patrick’s transportation reform agenda that authorized the innovative new financing approach for our Accelerated Bridge Program,” said Secretary of Administration and Finance Glen Shor. “This ratings upgrade means lower borrowing costs which translates into millions of dollars of savings for taxpayers.”
The move by Moody’s upgrades the rating of the ABP GANs ahead of the upcoming $287.9 million GANs issuance which is expected to open to retail investors only on November 4th and to institutional investors on November 6th. Moody’s has also assigned its Aaa rating for the outstanding Commonwealth Transportation Fund (CTF) Bonds which also fund the ABP. The upcoming $365 million issuance of CTF Bonds is also expected to open to retail investors only on November 4th and institutional investors the following day.
The Accelerated Bridge Program was created by the Legislature in 2008, with a goal of reducing the number of structurally deficient bridges across the Commonwealth. In creating the ABP initiative, the Legislature authorized two different borrowing programs to provide the financing for the bridge repair program across the Commonwealth. According to MassDOT, there are more than 200 bridge projects currently underway.
Aside from the new Moody's rating of Aa1, the other ratings on the GANs include an AAA rating from Standard & Poor’s and an AA+ rating from Fitch Ratings. The CTF bonds have ratings of AAA and Aaa from S&P and Moody’s respectively, and are not rated by Fitch.