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Debt Program

MDTA issues toll revenue bonds to provide a portion of the capital funds needed for MDTA projects. MDTA also issues conduit debt for other transportation-related projects on behalf of the Maryland Department of Transportation (MDOT), not tied to toll revenues.

Transportation Facilities Projects (TFP) Revenue Bonds

The MDTA's toll-backed revenue bonds are known as Transportation Facilities Projects (TFP) Revenue Bonds. Through fiscal year 2020, the MDTA is subject to a legislatively enacted debt limit of $2.325 billion for bonds secured by toll revenues as of June 30 of any year. In addition, MDTA is subject to an annual debt limit pursuant to Executive Order 01.01.1998.07 which requires an annual review and approval of planned State agency debt by the Maryland Department of Budget and Management.

All of the MDTA's toll-backed bonds are subject to the same system pledge of toll revenues and compliance with the same Trust Agreement based rate covenant. As such, revenue from all the toll facilities is pooled together as a single revenue pledge. The rate covenant requires that MDTA fix, revise, charge and collect rentals, rates, fees, tolls and other charges and revenues for the use or services of the Transportation Facilities Projects in order to produce in each bond year Net Revenues in an amount not less than the sum of: (a) 120% of the Debt Service Requirement for outstanding bonds, and (b) 100% of the amount budgeted for deposits to the Maintenance and Operations (M&O) Reserve Account.

Rate Covenant Calculation
(Operating Revenues - Operating Expenses) divided by
(120% Debt Service Requirement + 100% budgeted for deposited to M&O) ≥ 1.0

Failure to maintain a rate covenant of greater than or equal to 1.0 annually would contractually result in the trustee stepping in and taking control of setting toll rates sufficient to adhere to this requirement. MDTA's historical rate covenant has shown strong coverage with operating results well above the 1.00 times minimum coverage level:

Year EndingCoverage Level
20162.87
20153.42
20142.85
20132.07
20122.29
20112.95
20103.49
20091.96
20082.43
20072.05


See Financial Forecast for future year estimates.

As part of its Additional Bonds Test, prior to issuing any new debt, the MDTA must certify that this rate covenant has been met in the 12 consecutive months out of the proceeding 18 month period. In addition, MDTA must certify on a prospective basis that the rate covenant will be met in the current bond year, and in the 5th complete bond year following the completion date of a bond-financed additional project or project improvement. MDTA's bond year begins on July 1 and ends on June 30.

The MDTA has also adopted an administrative policy goal which presents a higher and more stringent test of adequacy of revenues than the Rate Covenant in the Trust Agreement. Through fiscal year 2020, the Debt Service Coverage Policy requires that the Net Revenues cannot be less than 2.5 times the Debt Service Requirement of current and projected Outstanding Debt.

Debt Service Coverage Calculation
(Operating Revenues - Operating Expenses) divided by
(100% Debt Service Requirement) ≥ 2.5

Adherence to a 2.5 coverage ratio supports MDTA's policy to seek to maintain the highest possible investment grade credit rating for its debt issuances. MDTA's TFP Revenue Bonds are rated as follows:

Credit Rating AgencyCredit
Ratings
Outlook

Standard & Poors

AA-Stable
Moody'sAa3Positive
FitchAA-Positive

All three major rating agencies have consistently rated MDTA's toll-backed debt in the AA category with a Stable or Positive Rating Outlook. These favorable ratings are a reflection of MDTA's prudent management practices, diversified system revenue pledge, strong debt service coverage and historical rate covenant compliance.

Over time, credit factors which affect bond ratings can change due to market expectations and economic conditions. The MDTA posts credit rating changes through the Electronic Municipal Market Access System (EMMA), a public website maintained by the Municipal Securities Rulemaking Board. In accordance with the requirements of various Continuing Disclosure Agreements, the MDTA posts notice of credit rating changes at http://emma.msrb.org/.

Transportation Facilities Projects
Revenue Bonds
(Toll-Backed) Base CUSIP 574300
Original
Issuance
Outstanding as
of 7/1/17
Primary
Purpose
Series 2007$300,000,000$282,650,000I-95 ETL Project
Series 2008$573,305,000$514,355,000System Improvements
Series 2008 (2nd) TIFIA1
*Total Principal Loan Commitment
**Liability as of 7/1/17
$516,000,000*$518,121,848**ICC Project
Series 2009A (Tax-Exempt)$98,870,000$77,645,000System Improvements
Series 2009B (Federally Taxable
Build America Bonds)
$450,515,000$450,515,000I-95 ETL Project
ICC Project
Series 2010A (Tax-Exempt)$29,795,000$15,780,000System Improvements/
Capital Interest
Series 2010B (Federally Taxable
Build America Bonds)
$296,640,000$296,640,000System Improvements
Series 2012$67,610,000$60,270,000Refund Series 2004 Bonds (partial)
Total--$2,215,976,848--

Note: Outstanding amounts reflect July 1, 2017 principal payments. On July 27, 2017, the series 2007 bonds were redeemed through the issuance of a Series 2017 Refunding bond issue. There is a series of bonds issued in 1978 that were legally defeased, which fully matured on July 1, 2016. There is a series of bonds issued in 1968 that have been fully redeemed. Please contact The Bank of New York Mellon for further information at 1-800-254-2826.


1TIFIA is an acronym for Transportation Infrastructure Finance and Innovation Act of 1998. The TIFIA loan is evidenced by a TFP Bond which is at parity with MDTA's other toll-backed bond issues.

Conduit Revenue Bonds

Conduit debt is backed by revenue from transportation projects that are not toll related. For example, MDTA has financed projects at BWI Thurgood Marshall Airport and parking garages in Annapolis and Prince George's County, Maryland by issuing bonds which are secured by revenues associated with those projects.

MDTA has also issued debt specifically for the Intercounty Connector (ICC) project that is backed by Maryland's federal highway aid; these bonds are known as Grant Anticipation Revenue Vehicles or GARVEE bonds.

The MDTA is a party to other individual Trust Agreements for each conduit bond issue.

The MDTA strives to maintain the highest possible investment grade credit ratings for its conduit debt issuances. Outstanding conduit debt issuances have received the following ratings from the three major credit rating agencies. Below is a list of MDTA's debt issuances that are not backed by toll revenues.

Conduit Bonds for BWI Thurgood Marshall Airport (Non-Toll Backed)

Conduit Bonds for BWI
Thurgood Marshall Airport
(Non-Toll Backed)
Original
Issuance

Outstanding as
of 7/1/17

Primary
Purpose/
Security

Credit Ratings

Series 2002 Taxable Limited
Obligation Revenue Bonds
Consolidated Rental Car
Facility Base CUSIP 57429L

$117,345,000$84,560,000Rental Car Facility/
Customer Fee $3.75
per transaction
  • Moody's A3

Series 2012 A Passenger
Facility Charge Revenue
Bonds Base CUSIP 57429N

$50,905,000$41,535,000Infrastructure
Improvements/
PFC Fee $4.50 per
enplaned passenger
  • S&P A+
  • Moody's A2
  • Fitch A

Series 2012 B&C Passenger
Facility Charge Revenue
Bonds Base CUSIP 57429N

$135,470,000$112,910,000Infrastructure
Improvements/
PFC Fee $4.50 per
enplaned passenger
  • S&P A+
  • Moody's A2
  • Fitch A

Series 2014 Passenger
Facility Charge Revenue
Bonds Base CUSIP 57429N

$40,000,000$36,535,000Infrastructure
Improvements/
PFC Fee $4.50 per
enplaned passenger
  • S&P A+
  • Moody's A2
  • Fitch A
Series 2012 A&B
Airport Parking Revenue
Refunding Bonds
Base CUSIP 574298
$190,560,000$136,900,000

Refund Series 2002
A&B Parking
Bonds/BWI Parking
Revenues

  • S&P A
  • Moody's A2
  • Fitch A-
Total--

$412,440,000

----

Conduit Bonds for Other Parking Facilities (Non-Toll Backed)

Conduit Bonds for Other
Parking Facilities
(Non-Toll Backed)
Original
Issuance
Outstanding as
of 7/1/17
Primary
Purpose/
Security
Credit Ratings
Series 2014 Lease
Revenue Refunding Bonds Metrorail
Parking Projects
Base CUSIP 57429K
$27,200,000$22,320,000Refund Series 2004 Bonds/WMATA Lease
backed by Parking Fees
  • S&P AA+
  • Moody's Aa3
  • Fitch AA+
Series 2015 Parking Lease
Revenue Refunding Bonds
(Calvert Street Parking Garage Project)
Base CUSIP 57430M
$18,011,000$17,786,000Refund Series 2005 Bonds
State Employee
Parking Facility/State
Lease Appropriation
  • Unrated
Total--$40,106,000----

GARVEE Bonds (Non-Toll Backed)

GARVEE Bonds
Base CUSIP 57429R
(Non-Toll Backed)
Original
Issuance
Outstanding as
of 7/1/17
Primary
Purpose/
Security
Credit Ratings
Series 2007 Grant and
Revenue Anticipation Bonds
$325,000,000$67,150,000ICC Project/
Federal
Highway Aid
  • S&P AAA
  • Moody's Aa1
  • Fitch AA+
Series 2008 Grant and
Revenue Anticipation Bonds
$425,000,000$139,440,000ICC Project/
Federal
Highway Aid
  • S&P AAA
  • Moody's Aa1
  • Fitch AA+
Total--$206,590,000----

Note: On August 9, 2017, the Series 2007 GARVEE Bonds were redeemed through the issuance of a Series 2017 Refunding bond issue.

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