DelDOT Credit Ratings Remain Strong Despite Slow Economy

Dover -- The Department of Transportation (DelDOT) announces a successful Delaware Transportation Authority bond sale, providing $111 million in proceeds to fund capital projects, which affirmed the importance of the excellent bond ratings from Standard & Poor's and Moody's. The credit-conscious municipal market is rewarding high-grade issuers with lower interest rates.

The Transportation System Senior Revenue Bonds, 2009 Series A were issued to provide funds for DelDOT's capital transportation program. J.P. Morgan Securities, Inc. was the winning bidder among the eight underwriting syndicates that participated in the bidding. The True Interest Cost (TIC) was 3.96 percent for the sale. The bonds were affirmed as AA+ by Standard & Poor's, and Aa3 rating by Moody's Investors Services. Both rating agencies also reported a "stable" outlook for the transportation system revenue bonds.

Members of the Delaware State Senate voted on May 8, 2009 to allow DelDOT to sell bonds in June instead of July to pay for its capital program for the 2010 budget year that starts July 1. The bond sale allows DelDOT to borrow sooner than it would normally to keep current highway projects moving ahead as revenues from traditional sources such as tolls and motor vehicle fees have declined.

Governor Jack Markell said, "The proceeds from these bonds will allow DelDOT to preserve much-needed private sector jobs and continue work on important infrastructure projects. I congratulate DelDOT on its consistently strong credit rating, which saves taxpayer dollars."

DelDOT Secretary Carolann Wicks stated, "Year after year, the rating agencies give 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."

State Senator Robert Venables, co-chair of the Joint Bond Bill Committee said, "It keeps things moving, keeps people working. We got an excellent rating."

State Rep. Helene Keeley, Joint Bond Bill co-chairwoman, said, "By allowing the Department of Transportation to do this and move forward with the early bond sale, we were able to get a tremendous rate."

According to the Ratings Report issued by Moody's, 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.

Standard & Poor's high rating reflects Delaware's stable long-term economic fundamentals despite recent declines in key indicators as a result of the recession; and the state'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 in the current recession; the authority's strong historical and projected debt service coverage; rapid amortization of debt outstanding; and a clearly articulated capital transportation plan (CTP).