In October 2012, TxDOT’s Standard & Poor (S&P) credit rating increased from ‘BBB+’ to ‘A-’. S&P raised their rating because previously announced toll rates on the Central Texas Turnpike System (CTTS) are expected to improve financial performance of the system. Furthermore, demographic and traffic trends which have demonstrated strong growth are expected to continue.
Leveraging this improved credit rating and favorable market conditions such as lower interest rates than when the bonds were initially sold, TxDOT refinanced $810.3 million of outstanding debt used to fund the Central Texas Turnpike System (CTTS) around Austin.
This refinancing action will save the state some $200 million over the life of the bonds. These savings highlight the innovative way in which TxDOT is funding projects and leveraging favorable market conditions as a standard practice. These types of key bold moves are critical components in the agency’s move to modernize and operate more like a business.