Moody's Assigns Aa2 Rating to Florida Turnpike Revenue Bonds

Strategic Insights -

The Florida Department of Transportation's (FDOT) $147.7 million Turnpike Revenue Bonds, Series 2025C, have been assigned an Aa2 rating by Moody's Investors Service. The rating reflects the turnpike system's strategically vital role in Florida's economy, effective tolling operations, and prudent financial and capital management. The stable outlook is based on sustained above-average financial metrics, forecasted toll revenue growth, and annual debt amortization, despite the $9.8 billion large capital improvement plan (CIP) being implemented through fiscal 2030.

Key Takeaways:

  • The Aa2 rating reflects the turnpike system's strategic importance in Florida's economy, effective tolling operations, and prudent financial and capital management.
  • The rating is supported by sustained above-average financial metrics, forecasted toll revenue growth, and annual debt amortization, despite the $9.8 billion CIP.
  • Approximately $4.1 billion of capital projects are anticipated to be funded through planned issuances of additional bonds in fiscal 2026 through fiscal 2030.
  • The majority of the capital projects are revenue-additive widenings and expansions.
  • The turnpike system has a declining debt service schedule, providing room to add new debt without materially increasing near-term debt service costs.
  • The rating incorporates the turnpike system's demonstrated strong relationship with its owner FDOT and the state through centralized debt and financial oversight.
  • The state legislated toll rate regime requires inflation-indexed toll rate increases over time.

Statistics:

  • Moody's assigned an Aa2 rating to the FDOT's $147.7 million Turnpike Revenue Bonds, Series 2025C.
  • The turnpike system has a long history of effective tolling operations with a prudent approach to financial and capital management.
  • Approximately $9.8 billion will be budgeted for the CIP through fiscal 2030.
  • $4.1 billion of capital projects are anticipated to be funded through planned issuances of additional bonds in fiscal 2026 through fiscal 2030.
  • The majority of the capital projects are revenue-additive widenings and expansions.

Sources:

  • Moody's Investors Service
  • Publicly Managed Toll Roads and Parking Facilities, published in May 2023, available at https://ratings.moodys.com/rmc-documents/403120