A bond rating service has retained an A1 rating for the debt of the Delaware River and Bay Authority while taking note of bridge tolls that are lower than at comparable structures.
The authority is proposing a reported $1 toll increase to the $4 paid at the Delaware Memorial Bridge.
The Delaware Memorial Bridge, which crosses the Delaware River and connects two of the most heavily trafficked highway corridors in the Northeast, is the two-state agency’s generates 75 percent of its operating revenue and 100 percent of net revenues.
“Moody’s affirmation of our rating is a reflection of our organizational strength and commitment to fiscal responsibility,” said Victor Ferzetti, chief financial officer for the DRBA. “As public stewards of important regional transportation assets, the authority will continue to make necessary and prudent infrastructure investments in our network of transportation services that benefits the traveling public. It’s a responsibility we take very seriously.”
The rating reflects the authority ’s fiscal management, comfortable debt service coverage ratios, and the expected maintenance of satisfactory liquidity levels. The stable outlook on the Authority also takes into account the agency’s reliance on its primary asset, the Delaware Memorial Bridge, to fund capital requirements and the bridge ’s competitive advantage compared to nearby alternatives.
Ferzetti noted that the Authority’s capital infrastructure projects in fiscal 2019 and beyond – particularly at the Delaware Memorial Bridge – will require a toll increase to provide the borrowing capacity or cash to pay for them. Moody’s pointed out in its report that the toll rates on the Twin Spans are lower than at competing facilities and the DRBA has a history of implementing toll increases in a timely manner.
Alternate bridges, the Commodore Barry and Walt Whitman Bridge already charge $5. Maryland charges $8 to nonresidents at its Interstate 95 and Route 40 bridges over the Susquehanna River. Tolls for a trip from Washington, D.C. to New York City can run more than $38.
Earlier this year, Standard & Poor’s (S&P) reaffirmed its credit rating for the DRBA of A with a stable outlook.
The ratings are important because a higher rating means investors see lower risks and will be willing to receive lower interest rates on bonds.
The DRBA, a bi-state governmental agency created by Compact in 1962, owns and operates the Delaware Memorial Bridge, the Cape May- Lewes Ferry, and the Forts Ferry Crossing. The DRBA also manages corporate and aviation properties through its economic development powers – two airports in New Jersey (Millville Airport and Cape May Airport) and three in Delaware (New Castle Airport, Civil Air Terminal and Delaware Airpark).
All DRBA operating revenues are generated through the bridge, ferry and airport facilities. For more information, visit www.drba.net.
