Analyses of GARVEE Bonding Capacity 2008

IV. Information Sources

Pledged Revenues:

In performing these bonding capacity analyses, the STO is using data obtained from the Department regarding deposits into the State Highway Account in the State Transportation Fund from federal transportation funds.  The amounts provided by the Department represent federal funds that can be legally pledged under the Master Trust Indenture for payment of the Bonds.  The federal transportation funds legally available for payment of debt service include those derived from federal aid authorization under Title 23, including apportioned funds (i.e., National Highway System, Interstate Maintenance, Highway Bridge Rehabilitation and Replacement, Surface Transportation Programs, Congestion Mitigation and Air Quality and amounts available under minimum guarantees) with corresponding Obligation Authority (OA).  Excluded from these total funds and OA legally available for payment of debt service are those categories of funds related to specific congressional action (i.e., High Priority Projects – better known as “Earmarks”) and other specified programmatic “set-asides” as determined in law by formula (i.e., State Planning and Research, Metropolitan Planning, Revenue Aligned Budget Authority, Discretionary, and Section 163).

This information was provided on a monthly basis for the period of January 2006 through December 2007.  See Attachments A-1 and A-2 for the complete listing of these monthly deposits and related calculations.  The additional bonds test is based on the highest consecutive 12-months of pledged revenue deposits in the prior 24-month period.  These historic annual deposits are a known quantity at any given point in time, but clearly are subject to change over time, and must be re-examined at the time of each potential GARVEE bond issuance.

Final Maturities:

The analyses in the report assume additional GARVEE bonds issued in 2008 with final maturities in 2014 and 2020.

Interest Rate Assumptions:

Estimates of potential interest costs under various scenarios were developed by the STO based on the AA index published by Municipal Market Data (MMD), a widely used industry benchmark.  The interest rate assumptions used for the analyses are based on the weighted average coupon, using a level debt solution for each final maturity (or amortization period).