Moody’s affirms Sound Transit bond ratings in tough economic climate

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Management of tax revenue shortfalls, flexibility of capital program maintain agency's high ratings

Moody's Investor Service affirmed its Aa1 and Aa2 ratings for all outstanding Sound Transit senior and parity bonds yesterday as ratings of many transit agencies across the country have been downgraded as a result of lost tax revenues and growing financial instability.

The investor service cited Sound Transit's Board and leadership team's proactive management of a forecasted $3.9 billion in revenue shortfall, the flexibility Board and staff built into the agency's mass transit capital program, and the ability of the agency's financial plan to weather economic uncertainties as reasons for affirming Sound Transit's high bond ratings.

Moody's also identified the agency's high debt service coverage ratios as a demonstration of Sound Transit's short- and long-term financial strength.

"This affirmation reflects Sound Transit's strong fiscal management of taxpayer dollars during the country's worst recession in fifty years," said Sound Transit chief financial officer Brian McCartan. "Our Board and staff have worked long and hard with the region's citizens and stakeholders to preserve as much of the voter-approved Sound Transit 2 program as possible while effectively managing constrained resources."

Earlier this year, Moody's upgraded Sound Transit's then already high ratings by a notch for its senior and subordinate bonds to reflect the lower risks associated with bonds issued by many local governments.