The long-term ratings for the Pennsylvania Turnpike Commission’s Turnpike Revenue Bonds, Turnpike Subordinate Revenue Bonds, and Motor License Fund-Enhanced Turnpike Subordinate Special Revenue Bonds (MLF-Enhanced Bonds) are underpinned by the essentiality, solid market position and relatively inelastic demand profile of the turnpike system. Statutorily required annual toll increases, together with operational cost controls, have historically produced debt service coverage exceeding targets and covenants for each of the respective obligations in the face of a substantial debt burden.
The rating for the Turnpike Revenue Bonds reflects their payment from a senior lien pledge of net toll revenues collected by the Commission from operation of the turnpike system. All fixed rate, senior lien obligations, including the Bonds, are further secured by a debt service reserve fund maintained at 1.00x maximum annual debt service on senior lien obligations.
The rating for the…
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