S&P Global revised outlook on USVI GARVEE bonds to stable and affirmed A rating

S&P Global Ratings revised the U.S. Virgin Islands’ outlook on outstanding grant anticipation revenue vehicle, or GARVEE, bonds from negative to stable and affirmed the bonds’ A rating, according to a Government House announcement published Dec. 17, 2019.

The rating applies to Virgin Islands Public Finance Authority GARVEE bonds. S&P Global Ratings credit analyst Kevin Archer said the outlook revision reflected the availability of the authority’s Transportation Trust Fund revenue after weather-related impacts in prior years.

Government House said the bonds are backed by the Public Finance Authority’s Transportation Trust Fund. After Hurricanes Irma and Maria in September 2017, the authority had projected that trust fund revenue would decline in fiscal 2018 and could face further declines or be diverted to other needs.

According to the announcement, S&P said the pledged Transportation Trust Fund revenue was not affected as originally forecast, and that greater certainty about the availability of that revenue had stabilized its view of the credit profile.

Government House also said Moody’s Investors Service confirmed in September 2019 that the territory’s Caa3 issuer rating was stable, along with ratings on four liens of matching fund revenue bonds issued through the Public Finance Authority.

Official source: https://www.vi.gov/sp-global-upgrades-usvis-rating-on-garvee-bonds/