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DRPA's credit rating improves

The Delaware River Port Authority got a boost from Wall Street yesterday, as a leading credit-rating agency upgraded its assessment of most of the DRPA's debt.

    by Paul Nussbaum, Inquirer Staff Writer
    Published 

The Delaware River Port Authority got a boost from Wall Street yesterday, as a leading credit-rating agency upgraded its assessment of most of the DRPA's debt.

Citing the port authority's "return to stable governance," Standard & Poor's Ratings Services raised its rating to A- for the $808 million in revenue bonds the DRPA has outstanding. The rating had been BBB+.

S&P kept in place a lower rating for the DRPA's $351 million borrowed for "economic development projects." That debt is rated at BBB-, the lowest investment-grade rating.

John Hanson, DRPA's chief financial officer, said the improved credit rating will make it easier for the two-state agency to borrow and get lower interest rates.

The port authority, which operates four toll bridges and the PATCO High Speed Line, plans to borrow about $350 million by the end of this year for planned bridge repairs and upgrades to rail cars.

To pay for those projects and other planned capital improvements in the next few years, the DRPA raised bridge tolls and train fares, effective last September. Tolls went up by a dollar to $4 for passenger cars and are scheduled to go to $5 in September 2010.

In its report on the DRPA, Standard and Poor's said the higher rating "is based on the essential nature of the bridge system . . . and the authority's solid financial position, which is offset by the need to support noncore activities, which draw heavily on the authority's financial resources."

Those "noncore activities" include subsidizing the PATCO rail line and funding economic development projects on both sides of the river.

In the last decade, the DRPA has spent more than $375 million on such projects as sports arenas, museums, and concert halls.

PATCO's deficit was about $23 million last year, as passenger fares covered only half the $46 million cost of running the rail line.

Hanson said that PATCO's "farebox recovery" is among the highest in the nation and that ridership and revenue have risen steadily for PATCO over the last five years.