Moody’s Upgrades Maryland Department of Transportation Rating to AAA
The credit rating agency Moody’s has upgraded the Maryland Department of Transportation’s Consolidated Transportation Bonds to its top triple-A rating. Maryland Transportation Secretary Paul J. Wiedefeld says this upgraded rating reflects Moody’s confidence in the strong financial management practices of the Department and will result in lower borrowing costs and debt service savings for Maryland residents. This is the Department’s first credit rating upgrade since 2010 and marks achievement of the highest credit rating available. The Department also maintains a AAA rating from Standard & Poor’s, as well as a rating of AA+ from Fitch Ratings.
Additional Information from the Maryland Department of Transportation
The rating upgrade places the Department’s debt at the same credit rating as the State’s general obligation debt and reflects a change made by Moody’s to the U.S. States and Territories rating methodology. Moody’s cites the State’s strong involvement in, and oversight of, the Department’s debt program, including proactive financial management that includes regular revenue monitoring and forecast revisions and the ability to make mid-year adjustments, as drivers of the upgrade. Moody’s assigned a negative ratings outlook to the bonds to match the State’s outlook.
Consolidated Transportation Bonds are issued by the Department to help fund projects included in the Consolidated Transportation Program, which details a six-year capital budget investment in the state’s transportation network. The bonds are repaid from the Transportation Trust Fund, which includes certain revenues pledged to the repayment of the bonds, including gas tax, vehicle excise (titling) tax, a portion of the state’s corporate income tax and a portion of the state’ sales tax on rental vehicles. There is approximately $3 billion of outstanding Consolidated Transportations Bond debt. Additional information about MDOT’s debt program is available at: www.mdotbondsmaryland.com/.
