The New York State Thruway Authority saw its credit rating cut one step to A2 by Moody’s Investors Service, which said the agency may not raise tolls fast enough to cover costs for a new $3.9 billion Tappan Zee Bridge.
The drop to the sixth-highest rating also reflects the possibility that the bridge contractor, a group led by Irving, Texas-based Fluor Corp., won’t be able to meet the project’s schedule and stay within budget, even though most of the costs are fixed under a design-build contract, Moody’s said in a report Friday.
The agency, which operates the longest U.S. toll road, is already saddled with $3.9 billion in debt, which will more than double as it sells $2.4 billion in bonds and borrows another $1.6 billion through a federal loan it won Oct. 31 to build the new span over the Hudson River.
“Failure to deliver the project within budget and on time due to higher project costs, a longer permitting or construction period or insufficient toll increases to support associated debt would place negative pressure on the rating,” Moody’s said.
Authority spokesman Dan Weiller didn’t respond to a request to comment on the rating cut.
Gov. Andrew M. Cuomo has made building the new span, which is about 20 miles north of Manhattan, a priority, comparing it in scope to the 19th century construction of the Erie Canal. It’s among the largest public-works projects in the U.S. The federal Transportation Infrastructure Finance and Innovation Act loan the state received is the largest ever issued under the program.
The Moody’s downgrade and a cut Oct. 29 by Standard & Poor’s hasn’t deterred investors from buying the agency’s debt.