Transportation bond sale saves state $3.2 million

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The Department of Transportation (DelDOT) has completed a Delaware Transportation Authority bond sale, providing $75 million in proceeds to fund capital projects.The bonds were sold on April 26.

The bond issue was aided by the state’s blue-chip debt rating.

The Transportation System Senior Revenue Bonds were issued to provide funds for DelDOT’s Capital Transportation Program. An additional $41 million of the proceeds will be used to refund outstanding higher cost bonds, saving the Department over $3.2 million in debt-service payments.

DelDOT Secretary Jennifer Cohan stated, “The rating agencies have given us high marks for a sound and well managed financial plan. This latest bond sale comes at an opportune time because the interest rates to pay back this money are favorable.”

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The bonds were in high demand with Bank of America Merrill Lynch being the winning bidder among the nine bids received using a competitive sales format. The True Interest Cost (TIC) was 2.67 percent for sale. The bonds were affirmed as AA+ by Standard & Poor’s, and Aa2 rating by Moody’s Investors Services. Both rating agencies also reported a “stable” outlook for the transportation system revenue bonds, based on the strength and diversity of pledged revenues and limited anticipated future borrowing, which suggests that coverage of anticipated debt service will remain satisfactory.

The bonds were affirmed as AA+ by Standard & Poor’s, and Aa2 rating by Moody’s Investors Services. Both rating agencies also reported a “stable” outlook for the transportation system revenue bonds, based on the strength and diversity of pledged revenues and limited anticipated future borrowing, which suggests that coverage of anticipated debt service will remain satisfactory.

According to the Rating Agencies, the high-quality credit rating is based on the strength and diversity of pledged state transportation revenues, a limit on the issuance of additional debt against these resources, and adequate coverage of debt service. Additionally, they noted Delaware’s strong commitment to the transportation program, which includes its willingness to enhance transportation-related revenues statewide to support capital and infrastructure investments. The ratings also reflect the diverse mix of pledged revenues that has contributed to revenue stability even during poor economic conditions; the authority’s strong historical and projected debt service coverage; rapid amortization of debt outstanding; and a clearly articulated capital transportation plan.

Additionally, they noted Delaware’s strong commitment to the transportation program, which includes its willingness to enhance transportation-related revenues statewide to support capital and infrastructure investments. The ratings also reflect the diverse mix of pledged revenues that has contributed to revenue stability even during poor economic conditions; the authority’s strong historical and projected debt service coverage; rapid amortization of debt outstanding; and a clearly articulated capital transportation plan.

The ratings also reflect the diverse mix of pledged revenues that has contributed to revenue stability even during poor economic conditions; the authority’s strong historical and projected debt service coverage; rapid amortization of debt outstanding; and a clearly articulated capital transportation plan.

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