This week we have announcement of two significant bond offerings to cover transportation funding. According to ENR, Governor Bob McDonnell announced last Friday that Virginia will sell $500 million in bonds for transportation projects in the Commonwealth. This will be the first in a wave of bond offerings contemplated by Virginia which will total $2.2 billion over the next six years. Count me as an observer that says the state bonds are nice, but Virginia will not solve its transportation problems absent a steady, consistent and meaningful source of transportation funding at the General Assembly.
In separate news, the Washington Examiner reports today that the Metropolitan Washington Airport Authority announced plans for a $650 million bond sale this month . This bond issuance is calibrated to take advantage of stimulus funding support towards interest expenses. The MWAA bond issuance is planned to help defray costs for the Metro rail extension to Dulles Airport and will be paid down by proceeds from the Dulles Toll Road.
The Washington Examiner report notes that the MWAA bonds issued last year for Dulles Rail received a A rating from Standard and Poor’s and an A2 rating from Moody’s. In contrast, this latest issuance received a Baa1 and Baa2 rating from Moody’s. Moody’s cited risks associated with slow toll revenue growth, construction cost overruns, and the potential loss of the stimulus bond subsidy.
Image from VDOT/VA Mega Projects