NEW YORK - On April 23, S&P Global Ratings assigned its 'AA-' rating to the Port Authority of New York & New Jersey's (PANYNJ) pro forma $412 million, 209th series; $300 million, 210th series; and $200 million, 211th series consolidated bonds, using its "U.S. And Canadian Not-For-Profit Transportation Infrastructure Enterprises" criteria, published March 12, 2018. The outlook is stable. At the same time, S&P Global Ratings affirmed its 'AA-' rating, with a stable outlook, on the PANYNJ's previously issued consolidated bonds.
The new bonds will be on par with all other consolidated bonds. The 209th series' bond proceeds will refund the authority's 153rd series and fund capital projects or refund other obligations. The 210th and 211th series' bond proceeds will fund capital projects. After the proposed bonds are issued, the PANYNJ will have approximately $21.6 billion of consolidated bonds outstanding.
S&P Global Ratings also affirmed its 'AA-' rating, with a stable outlook, on New York Liberty Development Corp.'s series 1WTC-2011 liberty revenue bonds, which are on par with the authority's consolidated bonds.
In addition, S&P Global Ratings affirmed its 'A+' rating, with a stable outlook, on the PANYNJ's series 2011 liberty revenue bonds, issued for the 4 World Trade Center (WTC) LLC project, paid from the authority's consolidated bond reserve (CBR) fund.
Finally, S&P Global Ratings affirmed its 'A-1+' short-term rating on the authority's commercial paper (CP) notes. The short-term rating reflects our opinion of the ample liquidity and sufficiency of assets to cover the authorized amount of $750 million of CP obligations. The authority has identified approximately $1.357 billion--the market value as of Feb. 28, 2018--of cash and fixed-income assets to guarantee the purchase price of any CP or variable-rate debt obligations in the event of a failed remarketing. Management has established what we view as clear and detailed procedures to meet liquidity demands on time. Fixed-income investments consist of a diversified pool of high-quality assets in the CBR fund that PANYNJ manages internally under conservative investment parameters its investment policies govern. We monitor the assets' credit quality, liquidity, and sufficiency monthly.
"The 'AA-' rating reflects our opinion of the PANYNJ's extremely strong enterprise risk profile and strong financial risk profile," said S&P Global Ratings credit analyst Joseph Pezzimenti. The extremely strong enterprise risk profile reflects the PANYNJ's vital role in the region and the diversity of its operations. The strong financial risk profile reflects the PANYNJ's strong coverage, debt capacity, and liquidity and finance flexibility, offset by significant capital needs.
The stable outlook reflects our opinion the PANYNJ's market position will remain extremely strong with generally favorable demand for its various facilities, given their critical role and importance in the region and that the authority's coverage, debt capacity, and liquidity and financial flexibility will remain strong as it funds its significant capital needs.
We do not expect to raise the ratings during the next two years due to the authority's significant capital needs, which are keeping the debt burden elevated and pressuring coverage levels.
We could lower the ratings in the next two years if the authority's coverage were to erode considerably.
