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Puerto Rico Highway and Transportation Authority; Federal or state grant programs
Primary Credit Analyst: Adam Torres, New York (1) 212-438-2481; firstname.lastname@example.org Secondary Contact: Georgina Rovirosa, New York (1) 212-438-7983; email@example.com
Table Of Contents
Rationale Outlook Related Criteria And Research
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• A significant historical precedent that demonstrates a federal commitment and congressional approval for federal aid for highway programs and specific funding mechanisms to U. 2011.6x based on actual federal fiscal 2011 obligation authority in fiscal 2011. At the same time. In addition. or the failure of Puerto Rico to prudently manage the reimbursement process. amounts appropriated by Congress. 2012 2 932541 | 300971433 . territories dating back to 1970. As with other GARVEE programs. We believe credit weaknesses include the narrow pledge of FHWA reimbursements to the commonwealth. although modifications have been made. following our repeated attempts to obtain timely information of satisfactory quality to maintain our ratings on the securities in accordance with our applicable criteria and policies. A+(SPUR)/Stable Affirmed. Standard & Poor's removed the rating from CreditWatch with negative implications. 30.S. Puerto Rico's bonds could be negatively affected by declines in federal revenues available for distribution from the HTF. delays to congressional reauthorization. Standard & Poors | RatingsDirect on the Global Credit Portal | January 19. where it was placed Dec. changes to the federal aid highway program. there have been programmatic changes and modification to apportionments that could hurt the level of funding that the commonwealth receives. and the possibility of a decrease in pledged revenues resulting from a decline in revenues available for distribution to states and the commonwealth from the Highway Trust Fund or in the amounts appropriated by Congress. The outlook is stable. Removed from CreditWatch Rationale Standard & Poor's Rating Services has affirmed its 'A+' rating on Puerto Rico Highway and Transportation Authority's (PRHTA) grant anticipation revenue (GARVEE) bonds outstanding. • A restrictive historical 4. or delays in Congressional reauthorization. while there is a long history of federal funding of the Territorial Highway Program. • Very strong maximum annual debt service (MADS) coverage of 10. and • A fully funded debt service reserve fund.0x MADS additional bonds test. Federal or state grant programs Credit Profile Puerto Rico Hwy & Transp Auth grant antic Unenhanced Rating Many issues are enhanced by bond insurance. changes to the federal aid highway program. The rating incorporates our opinion of the following credit strengths: • Structural provisions that allow funds to flow directly from the Federal Highway Authority (FHWA) to trustee-held debt service accounts--upon semiannual funding authorization requests by the authority--before flowing to other purposes.Summary: Puerto Rico Highway and Transportation Authority. looking to the lowest historical receipts received during the three years before the proposed bond issuance.
Weaker or varying levels of appropriations could reduce the overall level of support and predictability associated with the grant programs. which. A significant decline in coverage. declining HTF balances. However. potential delays in authorizations. territories. we expect that Congress will continue to provide extensions as needed to allow uninterrupted construction programs and debt service payments. 2012.com/ratingsdirect 3 932541 | 300971433 . www.S. 2009. based on MADS or the commonwealth's failure to manage the reimbursement process prudently would be a rating concern. 30. Puerto Rico lacks the same legislative influence as U. Outlook The stable outlook reflects Standard & Poor's expectation that the long-standing federal aid highway program will continue to receive significant funding. Finally. including the cost of replenishing any debt service reserve fund.Summary: Puerto Rico Highway and Transportation Authority. if variable. The lack of any backup pledge of revenues by the territory or other federal unobligated balances from previous years exposes the authority to very long delays in the annual distribution of federal money from the highway account of the federal highway trust fund for reimbursement to states and. Funds are directed to the trustee before flowing to PRHTA for other projects. could affect our ratings. most recently to March 31. In our view.standardandpoors. and has been extended several times. program rule changes. and that Puerto Rico will receive its historical share of annual Title 23 distributions. in our view. which we view as very strong for most GARVEE issues we rate. This is the authority's only GARVEE bond issue. states and may collectively be on the losing end of any changes in apportionment formulae or overall funding levels under a program that has demonstrated a long. Structural aspects to the financing that build in coverage and cushions in payment and deposit dates have mitigated these risks. which occurs upon establishment of overall annual spending limits by congress and passage of the federal budget. As a territory. time cushions for payment dates and the requisition process give PRHTA an ability to correct lags or delays in the process to ensure timeliness. The FHWA has sanctioned in its project approvals and a memorandum of agreement (MOA) the use of the federal highway reimbursement revenues to pay the debt service on the series 2004 bonds as reimbursement for the eligible construction costs of the 2004 projects and eligible ongoing bond-related costs and expenses. Also. which primarily consists of federal aid revenues to PRHTA or the trustee. until passing a new reauthorization program. or Congressional or administrative modifications to grant programs will not end the long-standing practice of federal aid for transportation on which we base our GARVEE ratings. The authority covenants that it will obligate or commit federal aid highway funds in a sufficient amount to pay debt service in the year before it obligates or commits such funds for other transportation projects. and federal budget pressures could lead to lower authorization and appropriation levels and diminish coverage. in turn.6 million is outstanding. in this instance. The outlook further reflects our expectation that Congress will pass legislation that ensures the continuing authorization of surface transportation programs. history in funding. It matures in 2021. constrained funding sources. U. Distribution of money under the formula in federal law (called apportionments) to Puerto Rico can be made only after the annual obligation amount is set by the FHWA.S. changes in law. the current federal aid highway program expired Sept. this program encompasses risk characteristics unlike most GARVEE-secured transactions. Federal or state grant programs The bonds are special limited obligations of the authority payable solely from and secured by a first-lien pledge of the trust estate. As a GARVEE issuance not through one of the 50 states. of which $93.
Use the Ratings search box located in the left column.standardandpoors. Standard & Poors | RatingsDirect on the Global Credit Portal | January 19.Summary: Puerto Rico Highway and Transportation Authority.globalcreditportal. Federal or state grant programs Related Criteria And Research USPF Criteria: Methodology And Assumptions: Rating U. 2012 4 932541 | 300971433 .S. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.com. Federal Transportation Grant-Secured Obligations. 2009 Complete ratings information is available to subscribers of RatingsDirect on the Global Credit Portal at www.com. May 29.
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