Offering frequent news and analysis from the majestic Evergreen State and beyond, The Cascadia Advocate is the Northwest Progressive Institute's unconventional perspective on world, national, and local politics.

Friday, October 19, 2007

Sound Transit's bond rating improves

We've repeatedly said that Sound Transit is one of the best run agencies in the Country. But you don't have to take our word for it - financial experts agree:
Sound Transit's stellar credit rating got stronger today as one of the nation’s two major independent municipal bond rating agencies upgraded its bond rating.

The improved rating, from Moody's Investors Service, is good news for the Puget Sound region’s taxpayers and signals Sound Transit's strong financial health. Specifically, it will lower Sound Transit’s cost of borrowing money, enabling the public’s investment in regional transit projects and services to stretch further.


The Moody's report states that the upgrade is based on "historically strong financial operations, fast-growing ridership on all transit modes, and the authority's importance to the strong service area that includes the state's most populous counties." The report was in connection with an upcoming bond issue for the current Sound Move program.


Standard & Poor's, the nation’s other major rating firm, has already granted Sound Transit’s senior lien bonds their AAA rating, the highest possible.
Moody's and Standard and Poor's recognize what we've know for sometime, Sound Transit is a reformed agency. They operate efficiently, responsibly, and transparently and their projects are on-time and on-budget.

This upgrade is good news for Roads & Transit, should voters pass Prop. 1:
The Sound Transit 2 financial plan anticipates paying cash for 60 percent of the proposed investments and selling bonds to cover the remaining 40 percent. Bonds sales would be about $3.9 billion out of the plan’s capital costs of $10.8 billion in 2006 dollars. This compares to buying a house with a down payment of around 60 percent, when most homeowners sign mortgages with down payments of 0 to 20 percent.

As a result of Sound Transit’s strong bond rating, the amount of interest Sound Transit would pay for debt service on future borrowing will be lower than most public agencies in the region.

Sound Transit borrows money at very competitive interest rates and uses 30-year bonds with terms similar to those used by other public agencies. For Sound Transit 2, the agency would issue 30-year bonds incrementally over the 20-year period for delivering the projects, paying off the last bonds, issued as late as 2027, by 2057.
If there is any one agency that's worked incredibly hard to earn taxpayers' trust, it is Sound Transit. Puget Sound voters can feel confident placing their hard earned tax dollars in Sound Transit's hands.


Post a Comment

<< Home