FOR IMMEDIATE RELEASE
Aug. 16, 2017
MARYLAND TRANSPORTATION AUTHORITY SAVES
$210 MILLION THROUGH BOND REFINANCING
Credit Rating Agencies Reaffirm MDTA's Ratings
BALTIMORE, MD - The Maryland Transportation Authority (MDTA) will save $210 million in debt service over the next 24 years as part of a recent refunding and partial cash payoff of outstanding bonds. Lower annual debt payments allow the MDTA to invest more money in infrastructure needs across Maryland's toll facilities. Over the next six years, the MDTA's capital program totals $2.6 billion.
"Since the MDTA is self-sufficient and does not receive General Fund or Transportation Trust Fund dollars, this $210 million in savings will go directly back into Maryland's toll facilities," said Maryland Department of Transportation Secretary and MDTA Chairman Pete K. Rahn.
In 2007, the MDTA issued $300 million in bonds backed by toll revenues while constructing the Intercounty Connector and the I-95 Express Toll Lanes. In July 2017, the MDTA held a competitive sale to refund these bonds. Refunding bonds is similar to refinancing a home mortgage and allows the borrower to take advantage of current interest rates to lower costs. The refunding lowered the MDTA's true interest cost from 4.64% to 3.06%.
Prior to the sale, the three major credit rating agencies reaffirmed the MDTA's credit ratings at AA- from Fitch Ratings and Standard & Poor's and Aa3 by Moody's Investors Service. Both Moody's and Fitch have upgraded the MDTA's outlook from Stable to Positive within the last year.
"The savings produced as part of this creative and forward thinking transaction is a great example of how the MDTA takes seriously its responsibility to be good financial stewards of toll dollars," said MDTA Executive Director Kevin C. Reigrut. "As an agency fully funded by toll revenues, the MDTA uses a balanced approach between today's toll rates and long-term needs.
In addition, during the last two years, the MDTA has returned more than $50 million annually to drivers through toll rate and fee reductions and has fully funded the new $769 million US 301 Governor Harry W. Nice Memorial Bridge project. The Nice Bridge project also saved MDTA $200 million in toll dollars through practical design.
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