From Deseret News archives:
UTA bond rated 'AA' by 1 of 3 agencies
Fitch Ratings issued the grade on this year's bond and said in a press release that the rating reflects "the strength and diversity of the authority's service area in Utah's economic epicenter (the Wasatch Front), the pledge of growing sales tax revenue that currently provide ample coverage, and the demonstrated record of successfully and conservatively managing transit service operations and expansion."
The ratings are based on a number of criteria that include current and future performance evaluations, risk of loss or default and ability to meet financial commitments.
Carrie Bohnsack-Ware, spokeswoman for UTA, said the rating was "very good" and the same one received on last year's bond.
"This company ... hasn't given any higher rating than 'AA' to any municipal transit agency in the country," Bohnsack-Ware said.
Revenue generated by the bonds will go toward expansion goals that include the FrontRunner South (SLC to Provo) line, light-rail extensions and other system improvements.
Bohnsack-Ware said UTA expects equally positive ratings from Moody's Investor Services and Standard and Poor's Rating Services, the other two agencies that rate municipal bonds, which should be issued in the next few weeks.
Rand Jolley, a Wachovia Securities branch manager in Salt Lake City, said the 'AA' rating is very strong and definitely "investment grade."
"Municipal bonds are very attractive to folks in a high-tax bracket," Jolley said. "Since there is no state or federal tax applied to interest income on bonds, it outperforms other options that may have higher interest, but no tax advantages."
Bohnsack-Ware said that an additional benefit of the the high bond rating is that it will help save taxpayer dollars.
E-mail: araymond@desnews.com
