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Fitch Rates Commonwealth Transportation Board's (VA) Trans Rev Refunding Revs 'AA+'; Outlook Stable
Posted January 30, 2012
We Recommend...
NEW YORK--(BUSINESS WIRE)--Fitch Ratings has assigned an 'AA+' rating to the following Commonwealth Transportation Board (the Board) bonds:
--$84.4 million transportation revenue refunding bonds (Northern Virginia Transportation District Program) series 2012A;
--$36.555 million transportation revenue refunding bonds (U.S. 58 Corridor Development Program) series 2012B.
The bonds are expected to sell competitively on Feb. 1, 2012.
In addition, Fitch has affirmed the following outstanding ratings:
--Approximately $1.9 billion transportation board appropriation-backed transportation revenue bonds at 'AA+'.
The Rating Outlook is Stable.
SECURITY
The bonds are limited obligations of the commonwealth transportation board (CTB), secured by and payable from general assembly appropriations or CTB allocations from general assembly appropriations.
KEY RATING DRIVERS
--COMMONWEALTH APPROPRIATION OBLIGATION: The rating is based on ultimate access to legally available funds in the commonwealth's transportation trust fund and other general assembly appropriations.
--TRANSPORTATION TRUST FUND OFFERS BROAD BACKSTOP: Access to the broad transportation trust fund provides backstop security, though revenue composition can be altered by the legislature.
--AAA COMMONWEALTH GO RATING: The commonwealth's GO bonds are rated 'AAA' by Fitch, reflecting Virginia's substantial economic resources, conservative approach to financial operations, and lower-moderate debt burden.
CREDIT PROFILE
The 'AA+' rating is based on ultimate access to legally available funds in the Commonwealth of Virginia's (the Commonwealth) transportation trust fund (TTF) and other general assembly appropriations. For the Northern Virginia Transportation District Program bonds, appropriations for debt service are first met from specific allocations to the Northern Virginia Transportation District Fund, a separate, non-reverting fund within the TTF which receives portions of the commonwealth's recordation taxes imposed on deeds and deeds of trust attributable to the local jurisdictions in which projects are located, among other sources. Regarding the U.S. Route 58 Corridor Development bonds, appropriations for debt service are first met from specific allocations to the U.S. Route 58 Corridor Development Fund, a separate, non-reverting fund within the TTF which receives the first $40 million from the commonwealth's annual recordation taxes, among other monies allocated from commonwealth transportation funds.
Ultimately, there is access to legally available funds in the broader TTF and from other general assembly appropriations. The TTF receives a variety of revenues representing various highway-related taxes and a portion of the state sales and use tax. Trust fund revenues totaled $1.015 billion in fiscal year (FY) 2011 and are projected to total $1.057 billion in FY 2012, with the slight increase attributable to rebounding economic conditions. Highway purposes are allocated 78.7% of TTF revenues, though actual construction spending remains restrained as TTF revenues have supplemented maintenance and operation requirements.
Other commonwealth transportation bonds also have access to the TTF including those issued for the commonwealth's Route 28 and Oak Grove Connector projects. Also, the CTB's capital project revenue bonds which were initially authorized in the amount of $3.18 billion have access to TTF funds if necessary.
The commonwealth's 'AAA' rating reflects its substantial economic resources, conservative approach to financial operations which includes periodic revenue forecast updates, and lower-moderate debt levels. For further information regarding the commonwealth see 'Fitch Affirms Virginia's $1.7B GOs at 'AAA'; Outlook Stable,' dated Jan. 27, 2012 available at www.fitchratings.com.
Additional information is available at www.fitchratings.com. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Tax-Supported Rating Criteria' (Aug. 15, 2011);
--'U.S. State Government Tax-Supported Rating Criteria' (Aug. 15, 2011).
Applicable Criteria and Related Research:
Tax-Supported Rating Criteria
http://www.fitchratings.com/creditdesk/report...
U.S. State Government Tax-Supported Rating Criteria
http://www.fitchratings.com/creditdesk/report...
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