DelDOT retains top bond ratings ahead of $200M+ sale
DOVER – The Delaware Department of Transportation recently retained its top-tier credit ratings ahead of a planned bond sale of more than $200 million in debt next week.
Moody’s Investors Service and Standard and Poor’s, two of the four major credit rating agencies, gave DelDOT their second highest ratings, Aa1 and AA+, respectively, in recent reviews and graded the revenue outlook as stable. The reviews come before the department – the only state department that issues debt – goes to bond sale on Aug. 23 to sell $229 million to fund this year’s capital budget.
DelDOT’s current Capital Transportation Program will invest more than $4.5 billion in infrastructure maintenance and projects over the next six years. Retaining a high credit rating is imperative for states looking to invest in future projects at favorable interest rates.
“We greatly appreciate the recognition of the department’s strong financial and operational management, particularly throughout the pandemic,” Delaware Transportation Secretary Nicole Majeski said in a statement. “We will continue to work diligently to be good stewards of taxpayer dollars and use these savings to further invest in our state’s transportation system. The excellent work done by our finance team, led by Lanie Clymer, ensures our financial standing remains strong as we support the largest capital program in the department’s history.”
The Series 2022 bonds and outstanding transportation system senior revenue bonds are secured by a claim on the state’s Transportation Trust Fund revenue, which is made up of fuel taxes, tolls, motor vehicle fees, and more. Because DelDOT funds its capital improvement projects from the trust fund, it requires a separate credit rating than the state’s General Obligation bonds.
Both ratings are one step off the top AAA rating, but a welcome sign as the department was last evaluated in 2020. In the same recent review, S&P reaffirmed the state’s top AAA bond rating.
“Delaware continues to receive high marks for fiscal management which allows us to sustain the important investments we’ve made in our schools, our infrastructure, our communities, and our economy, including efforts to address the impacts of COVID-19 and future public health crises,” Gov. John Carney said in a statement. “All Delawareans can be proud of the work we’ve done with the General Assembly to boost the state’s finances prior to COVID-19, and the sustainable budget we passed this legislative session. These steps will help ensure Delaware is the best place to live, work, and raise a family.”