South Carolina Transportation Infrastructure Bank upgraded to Aa2 by Moody’s

The South Carolina Transportation Infrastructure Bank’s revenue bonds were upgraded to Aa2 from Aa3 by Moody’s Ratings, following a change in the rating agency’s methodology.

It was one of 225 credits Moody’s placed on review for possible upgrade July 25 when it released a revised rating methodology for “certain debt instruments supported by a pledge of special tax revenues that will now be rated under the sector methodology of the related government.”

Moody’s cited for Thursday’s upgrade its expectation that the state of South Carolina will continue to support the bank. Moody’s rates South Carolina Aaa. The outlook is stable at the new rating.

The action affects almost $1 billion in outstanding debt. It also affects a Series 2024A $151.9 million revenue refunding bond expected to sell on Sept. 9

“The upgrade to Aa2 is based on our expectation of strong support and oversight of the South Carolina Transportation Bank’s by its parent government, the State of South Carolina,” Moody’s said in its ratings report. “The state relies on SCTIB to finance large-scale transportation projects and has a record of augmenting the SCTIB’s revenue to ensure adequate debt service coverage and to provide adequate funding for capital projects.”

The bank’s revenue bonds are secured by a junior lien on truck and motor vehicle registration fees, payments from the state’s Department of Transportation from non-tax sources like Federal Highway Administration funds, loan payments from local governments and the state DOT, transfers from a revenue stabilization fund, and investment earnings.

The bank finances large transportation projects through grants or loans.

A Bond Buyer request for a comment from the bank wasn’t immediately responded to.