CONNECTICUT $115 MILLION TRANSPORTATION BONDS RATED 'AA-' BY FITCH -- FITCH FINANCIAL WIRE --
CONNECTICUT $115 MILLION TRANSPORTATION BONDS RATED 'AA-' BY FITCH
-- FITCH FINANCIAL WIRE --
NEW YORK, Jan. 24 /PRNewswire/ -- Connecticut's $115 million special tax obligation refunding bonds, transportation infrastructure purposes, 1992 Series A are rated 'AA-' by Fitch. The bonds are expected to be sold during the week of Jan. 27 through a syndicate led by Dillon, Read & Co. Inc. The new bonds will be serials, due on Feb. 15, 1993-2006; call provisions are yet to be determined.
The transportation infrastructure bonds are not general obligations of the state but are payable from pledged revenues derived from highway- related taxes and fees. Pledged revenues provide amply for debt service on the special tax bonds, which have been issued for a well planned and monitored long-term transportation program.
The trend of underlying growth in pledged revenues in the past two years has reflected the recessionary conditions in the state and, absent rate increases, has been negative. The motor fuels tax was increased by four cents, in staggered implementation, during 1991-92 and annual increases of two cents will occur in each of the next four years. At the same time, costs of the department of Motor Vehicles have been added to the special transportation fund, diminishing the additional monies which have been provided for transportation purposes. The governor in November recommended that some additional transportation costs be transferred to the fund as well, balanced by additional revenues, but no action was taken on the proposal. The 1992-93 budget will be presented in early February.
Estimated pledged revenues in 1991-92 cover transportation infrastructure debt requirements by 3.2 times. When debt service on general obligation transportation bonds is included, coverage drops to 2.2 times, and will remain at about that level through 1992-96. The credit trend, accordingly, remains stable.
/CONTACT: Claire G. Cohen of Fitch, 212-908-0552/ CO: ST: Connecticut IN: TRN SU: RTG SM -- NY086 -- 3297 01/24/92 17:17 EST