Fitch Upgrades RTA Ratings
December 20, 2019
December 20, 2019
I’m pleased to announce that Fitch Ratings has upgraded RTA’s long-term bond rating to AA+ from AA. Fitch also affirmed the RTA’s short-term bond rating at F1+, which is the highest rating Fitch Ratings awards. The Rating Outlook remains Stable.
The rating places the RTA among the most highly rated transit agencies in the country. A long-term rating in the double A category indicates the RTA’s fixed-rate bonds are solid investment grade securities. The short-term rating assigned to the agency’s variable-rate bond places RTA in the top tier of short-term issuers.
We know that the passage of Rebuild Illinois, the largest capital bill in the State’s history, played an important role in achieving these credit ratings. Boosted by this infusion of state funds, the 2020-2024 regional capital program provides the transit system with $2.6 billion over five years in new bonding authority and, for the first time, an estimated $227 million annually in sustainable revenue, referred to as ‘PAYGO’ funding.
The ratings report specifically mentioned that new state funding allowed the RTA to nearly double the regional five-year capital program to $8.3 billion, which focuses on bringing the system toward a state of good repair, expediting overdue repair and replacement projects, and reducing the backlog of deferred improvements. Fitch analysis also stated that “the long-term rating upgrade to 'AA+' from 'AA' is based on improved cash flow from reduced state payment delays combined with solid pledged revenue growth prospects and exceptional financial resilience throughout a downturn scenario.”
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