10/20/04
The Chicago Transit Authority earned strong ratings from three major rating agencies on its $250 million bond issue for capital improvement projects. The CTA received an A2 bond rating from Moody's Investors Service, a leading global credit rating, research and risk analysis firm that publishes credit opinions, research, and ratings on fixed-income securities, issuers of securities and other credit obligations. Standard & Poor's, a leading provider of independent research, indices and ratings, provided an A rating for the CTA. Fitch Ratings also assigned an A rating to the CTA. With insurance, the bonds were issued with an AAA rating.
The bonds, which were priced and sold on October 19, were secured by grant receipts from Federal Transit Administration (FTA) Section 5307 formula funds.
The CTA issued $250 million in Grant Receipt Revenue Bonds for projects such as renovating the Dan Ryan branch of the Red Line; expanding capacity on the Brown Line; reconstructing rail stations; reconstructing a bus garage; replacing bus fareboxes; purchasing new rail cars; and construction of a new rail station at Block 37. "These strong bond ratings reflect CTA's fiscal responsibility and its track record of securing federal funding for capital projects and for managing those projects efficiently to keep them on time and on budget," said Carole Brown, Chairman of the Chicago Transit Board."
?This is the third bond issue for the CTA in the past two years. It will enable the CTA to leverage its resources to continue making improvements to its facilities and its infrastructure," said CTA President Frank Kruesi. ?Despite the challenges we face with operating funds, it is important that the CTA continue to invest in its facilities and equipment so that it can provide reliable service to its customers."
Issuing longer-term debt for these projects is similar to using a mortgage to pay for a long-term capital project up-front and paying off the debt over time.
CTA's financial advisors for the bond issuance are First Albany Capital, A.C. Advisory and Scott Balice Strategies.
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