A key bond rating agency has issued a negative outlook for outstanding revenue bonds issued by the Maryland Transportation Authority, amid uncertainty surrounding the reconstruction of the Francis Scott Key Bridge.
Standard & Poor’s reaffirmed the authority’s AA- bond rating, but in an April 25 report downgraded its outlook from stable to negative and warned of the potential for future changes.
“The outlook revision to negative reflects our view that there is at least a one-in-three chance we could lower the rating within the two-year outlook if potential project cost escalations and uncertain timing of future federal reimbursements weaken the authority’s ability to sustain financial metrics at levels comparable with those of peers as it finances the reconstruction of the Francis Scott Key Bridge and its $5.1 billion capital improvement program,” S&P Global Ratings credit analyst Andrew Stafford said in a statement.
The Standard & Poor’s announcement warned: “We could lower the rating if actual financial performance trends negatively, and is materially weaker than currently forecast due to construction cost escalations, project delays, or softening demand.”
“We do not anticipate raising the rating over the two-year outlook period, given MDTA’s relatively high debt burden and additional borrowing plans,” the credit rating agency said.
Currently, the authority has $2.1 billion in outstanding debt. In fiscal 2026, which begins in July, that amount is expected to “increase significantly” to $2.6 billion, according to an analysis by the Department of Legislative Services.
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