Fitch Ratings gives Wisconsin 'AA+' on transportation bonds

The State of Wisconsin's transportation revenue bonds have been given an “AA+” rating from Fitch Ratings this week.

The bonds, worth about $207.5 million, were expected to sell at a negotiated sale by Thursday. Fitch also gave the “AA+” rating to about $1.89 billion of outstanding state transportation revenue bonds, and added the the rating outlook is stable.

The obligation bonds were secured by a first-lien pledge and used on vehicle registration and other related fees levied by the state. Fitch said fees collected by vehicle registration fees are “narrow though stable over time, and the state has periodically raised revenues to augment coverage.”

Fitch also said the state has “ample” coverage of its maximum annual debt service. In order to receive a satisfactory coverage the Additional Bonds Test requires any pledged revenues must cover debt service by 2.25 times. Total pledged revenues for Fiscal Year 2013 in Wisconsin were a little above the estimate of $644.7 million, and provide 2.8 times the coverage of the maximum annual debt service, Fitch said.

In Wisconsin, vehicle registration fees totaled about 84 percent of program income according to numbers from Fiscal Year 2014. Since 2003, the state has also been collecting other registration-related fees including titling and personalized license plate charges.