Moody’s Investor Service has upgraded TriMet’s $70 million Series 2015A and $65.7 million 2015B payroll-tax bonds to Aaa status. Moody’s made the upgrade due to the region’s robust economic growth and “TriMet’s strong management of operations and capital projects,” which includes completing the $1.49 billion Max Orange Line on time and $48 million under budget.
TriMet is the first tax-backed transit agency to achieve an Aaa rating from Moody’s, which reflects the credit worthiness of government bonds.
“This is a strong endorsement that demonstrates we’re on the right track in expanding service and being financially sustainable for the long-term,” said Neil McFarlane, TriMet general manager.
Moody’s also noted TriMet’s strong management as a factor in the rating – evident in the delivery of the Max Orange Line project and the manner in which it addressed the impact of the financial recession. Moody’s noted that TriMet’s Board continues to follow best practices by adopting a Strategic Financial Plan that requires:
- Unrestricted reserve funds to no less than 2.5 times monthly operating expenditures
- Budgeted contingency set no lower than 3 percent of total operating requirements
- TriMet’s senior lien payroll tax bonds, lease payments and credit bonds to remain below 6 percent of TriMet’s continuing revenues
Moody’s also mentioned TriMet’s cost reductions during the last recession to balance its budget which created enough cash flow for unforeseen operational costs and allowed reinvestments in capital assets.
TriMet will issue bonds to restructure existing debt at more favorable terms, continue its bus replacement initiative and support the implementation of its new electronic fare collection program.
