Contact: Eric Young, San Francisco County Transportation Authority
SAN FRANCISCO—Moody’s Investors Services has raised the issuer rating for the San Francisco County Transportation Authority to Aa1 from its prior rating of Aa2.
Moody’s cited several reasons for the ratings boost, including the size and diversity of the economic base that generates San Francisco’s half-cent sales tax for transportation, the primary revenue source overseen by the Transportation Authority. Moody’s also cited strong growth in sales tax revenues since the recession and high current and anticipated coverage levels.
The Transportation Authority has no long-term debt, but does have a $140 million tax-exempt revolving credit agreement with State Street Bank, with $135 million outstanding.
“This ratings upgrade is a testament to the Transportation Authority’s strong agency leadership and stellar financial management,” said Scott Wiener, Chair of the Transportation Authority Board. “Amid a strong economy, the Transportation Authority’s financial strength and technical expertise are major assets to our growing city.”
Standard & Poor’s Financial Services and Fitch Ratings reaffirmed issuer ratings for the Transportation Authority with AA and AA+, respectively.
The strong issuer ratings mean:
- Reduced borrowing costs when the Transportation Authority uses its revolving credit facility.
- A low probability of defaulting on debt or payment to vendors, a favorable sign to investors.
The Transportation Authority on June 11, 2015 finalized an agreement with State Street Public Lending Corp. for a revolving credit agreement, replacing a commercial paper program. The revolving credit agreement is used to finance various transportation projects. Under the revolving credit agreement, financing costs are expected to be reduced by as much as $500,000 per year as compared with the costs of the agency’s prior commercial paper program.
“The Transportation Authority understands the critical role financial management plays as we plan, fund and deliver essential projects for San Francisco,” said Tilly Chang, Transportation Authority Executive Director. “We are gratified to be recognized for our focus on transparency and sound, cost-effective management of public funds.”
The agency’s history of sound financial practices extends for many years before the latest rating upgrade. Fiscal year 2014 marked the eleventh consecutive year that independent auditors issued clean reports for the Transportation Authority.
Since its start in 1989, the Transportation Authority has administered San Francisco’s half-cent transportation sales tax, allocating more than $2 billion to voter-approved projects, large and small. The sales tax program helps fund major capital projects such as the Presidio Parkway, Central Subway, Caltrain electrification and the Transbay Transit Center, as well as neighborhood-scale improvements like pedestrian crosswalks, faster bus routes and new traffic signals, citywide.
About the San Francisco County Transportation Authority (http://www.sfcta.org/)
Created in 1989, the Transportation Authority spearheads long-range planning and allocates funding for transportation-related projects in San Francisco. The Transportation Authority administers the city’s half-cent transportation sales tax, the Prop AA $10 annual vehicle registration fee program and the Transportation Fund for Clean Air. The Transportation Authority also serves as San Francisco’s Congestion Management Agency and is the Treasure Island Mobility Management Agency. The Transportation Authority Board consists of the 11 members of the San Francisco Board of Supervisors, who act as Transportation Authority Commissioners. Commissioner Scott Wiener is Chair of the Board. Tilly Chang is the Transportation Authority’s Executive Director.