KBRA Assigns Ratings to Various Pennsylvania Turnpike Commission Turnpike Subordinate Revenue Bonds and MLF-Enhanced Turnpike Subordinate Special Revenue Bonds
6 Mar 2026 | New York
KBRA assigns a long-term rating of A+ to the Pennsylvania Turnpike Commission Turnpike Subordinate Revenue Refunding Bonds, First Series of 2026 and Turnpike Subordinate Revenue Refunding Bonds, Second Series of 2026. KBRA additionally assigns a long-term rating of AA- to the Commission's Motor License Fund-Enhanced Turnpike Subordinate Special Revenue Refunding Bonds, First Series of 2026. The rating Outlook is Stable.
Proceeds of the Turnpike Subordinate Revenue Refunding Bonds, First Series of 2026 will be used, together with other legally available funds of the Commission, to defease all or a portion of certain outstanding bonds for present value savings and to pay the costs of issuance.
Proceeds from the Turnpike Subordinate Revenue Refunding Bonds, Second Series of 2026 and Motor License Fund-Enhanced Turnpike Subordinate Special Revenue Refunding Bonds, First Series of 2026 will be used, together with other legally available funds of the Commission, to tender all or a portion of certain outstanding bonds for present value savings and to pay the costs of issuance.
Key Credit Considerations
The ratings were assigned because of the following key credit considerations:
Credit Positives
- The Turnpike System is a highly essential, statewide, regional toll road system with limited competition.
- The Commission has full rate setting autonomy which, together with prudent finance management and controls, has supported strong margins and stable debt service coverage.
Credit Challenges
- The Commission’s O&M, capital and existing debt obligations, including its outstanding Act 44/89 obligations, are substantial and require annual toll increases, the cumulative effect of which may at some point dampen traffic demand, reducing operating margins and financial flexibility.
- The planned issuance of $3.6 billion in senior obligations per the 10-year capital plan may pressure subordinate obligation coverage if actual traffic demand is materially weaker than forecast, although the Commission’s capital plans remain flexible if traffic volumes are not consistent with forecasts.
Rating Sensitivities
For Upgrade
- A sustained trend of increasing net revenue resulting in debt service coverages well in excess of the Commission’s targets of 2.0x annual debt service on senior lien, 1.30x combined annual senior and subordinate debt service and 1.20x annual debt service for all obligations.
For Downgrade
- A sustained decline in net revenue DSCRs below the Commission’s targets for all obligations.
To access ratings and relevant documents, click here.