Rating Agencies: MassPike Finally Approaching More Stable Ground

Piazza, Johanna
June 2003
Bond Buyer;6/25/2003, Vol. 344 Issue 31664, p3
Trade Publication
Six months ago things looked bleak for the Massachusetts Turnpike Authority (MassPike). Financial obligations for the $14.5 billion Big Dig project in Boston were piling up, and commuter revenue was dwindling. Earlier this year, Moody's Investors Service Inc. downgraded $2.2 billion of bonds MassPike sold for the troubled Big Dig project, the redesign of transportation in Boston that has been underway since 1991. Fitch Ratings Inc. had already downgraded the system's senior bonds to BBB-plus from A and the junior to triple-B from A-minus in October as the authority prepared a peculiar derivative deal with Lehman Brothers, selling the second option for a fixed-to-floating interest rate swap on the $2.2 billion of outstanding MSH bonds. In addition to the debt issued for the Big Dig by MassPike, the state has issued roughly $4 billion of bonds to finance the mammoth undertaking.


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