Pa. Turnpike bonds get S&P's third-tier rating

Posted: June 28, 2013

Standard & Poor's assigned its third-tier rating to municipal bonds being sold to raise $476 million for the Pennsylvania Turnpike.

In assigning the "A+" rating, the rating agency cited the Turnpike Commission's high debt burden and uncertainty about future traffic levels, given the turnpike's annual toll increases. The commission is about $7.5 billion in debt, largely because state Act 44 compels it to pay $450 million a year for non-turnpike highway and transit projects, in addition to paying for turnpike maintenance and expansion.

A $265 million bond issue next month will refinance some existing borrowing, and a $211 million bond issue in August will finance on-going turnpike projects. S&P said it does not expect to raise its ratings for the Turnpike during the next two years, and it described the long-term ratings outlook as "stable." - Paul Nussbaum

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