PROVIDENCE
– The S&P Global Ratings agency upgraded the R.I. Turnpike and Bridge Authority's toll revenue bond rating from “A” to “A+."
Citing “improved metrics,” the agency said in a news release the positive outlook on outstanding toll revenue bonds “reflects our view that stable-to-improving demand and favorable revenue performance will continue to support the authority's very strong financial risk profile.”
“The upgrade reflects our view of RITBA's improved debt service coverage and debt-to-earnings before interest, depreciation, and amortization, and our expectation that the authority will continue to maintain financial metrics supportive of a very strong financial risk profile,” said S&P credit analyst Bikram Dhaliwal.
RITBA Executive Director Lori Caron Silveira said Thursday the authority is "very pleased with the S&P review."
"We appreciate the confirmation of the strong financial management of the authority, the strong guidance provided by the board of directors, and the hard work of our employees as we work to maintain these critical pieces of our state’s infrastructure," she said.
The agency does not expect to raise the rating over the two-year outlook period “given the authority's geographic and revenue-generating concentration of a single-tolled asset."
In 2022 Fitch rated RITBA's toll revenue bonds “A," noting the "stable commuter and leisure traffic profile of the Claiborne Pell Bridge," moderate toll rates and the authority's "ability to utilize residual state motor fuel tax revenues to service debt and fund portions of its capital plan.”
Though it has since rebounded, the pandemic caused a sharp decline in toll revenues due to a decrease in Newport Claiborne Pell Bridge usage in 2020 and 2021.
As of March 2023, the authority had $43 million of debt outstanding secured by toll revenues. The authority refinanced the remaining balance of its 2010 toll revenue bonds, lowering interest rates from 5% to 3.15%, and saving roughly $9 million over the life of the bond.
According to Feb. 21 board meeting minutes, R.I. Turnpike and Bridge Authority Chief Financial Officer Jeff Goulart, reported that operating expenses were lower than budgeted by $400,000 or 6%, with total revenue exceeding the budget by $3.9 million, or 18%, which was "100% driven by higher toll revenue."
Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.
