Debt

CCRTA utilizes a variety of methods for financing transit improvements that include fleet replacement, garage facilities, and bus stop improvement and amenities. These projects may be funded 100% by CCRTA or partially funded through a cost sharing arrangement. Cost sharing arrangements may include government grant awards or from joint development strategies. Grants typically require the Authority to provide a local match ranging from 15-20%. Joint development is a strategic partnership between the public and private sectors to maximize the utility and value of the transit system. CCRTA utilizes current revenues for project costs that are expected to be completed within the current budget year. Internal reserves for funding large, multi-year projects have been established by Board approved reserve policies to address the capital needs of the Authority.

Long-term debt is only used to source financing for authorized multi-year infrastructure related projects as in the case of the revenue bonds that were issued to fund the new Customer Service Center and transfer station projects.

CCRTA’s debt obligations stem from the October 8, 2019 issuance of $20,265,000 in refunding revenue bonds. This includes $15,055,000 in serial bonds and $5,210,000 in term bonds, with the latter maturing on December 1, 2028. The bonds are issued in $5,000 units with staggered maturities.

Refinancing the original 2013 debt resulted in $3,778,208 in interest savings and removed a restrictive covenant, releasing $1.6 million in cash reserves. The refinancing lowered the interest rate from 5.53% to 3.01%, achieving a 6.31% PV Savings Ratio—exceeding the Board’s 3.00% minimum threshold. The 2019 bond covenants also allowed CCRTA to purchase a $28,183 reserve fund insurance policy, further releasing $1.6 million for principal reduction.

These bonds are special obligations secured by CCRTA’s farebox (system) revenues. The bond covenant requires CCRTA to maintain fare and service rates that generate gross operating revenues sufficient to cover operating expenses while maintaining net operating revenues at least 1.10 times annual debt service requirements.

S&P Global Ratings assigned an “A+” long-term rating to the 2019 refunding bonds and affirmed the same rating for CCRTA’s outstanding system revenue bonds and issuer credit.

As of January 1, 2025, the outstanding balance on the Series 2019 Taxable Refunding Bonds is $15,855,000, with a final maturity on December 1, 2038. The bonds become callable on December 1, 2028.

The original 2013 issuance totaled $22,025,000 and was CCRTA’s first debt issuance. The bond proceeds funded the construction of the Staples Street transfer station and the adjacent 70,429-square-foot Staples Street Center, which houses customer service, administrative offices, and leased tenant space generating approximately $500,000 in annual rental income.

The 20-year bonds are first lien refunding bonds, and will be repaid, semi-annually from the pledged operating revenues of the Authority. Pledged revenues, as defined by the bond resolution, include the net operating revenues, plus any additional revenues, income, receipts, or other revenues which are pledged by the issuer. The interest rates adjust periodically during the life of the bonds.

S&P Underlying Rating (SPURs) affirmed its ‘A+’ rating on the Corpus Christi Regional Transportation Authority (CCRTA), Texas ‘ series 2019 system refunding bonds. At the same time, S&P affirmed ‘A+’ issuer credit rating (ICR) on CCRTA.

CCRTA will provide certain updated financial information and operating data to EMMA (Electronic Municipal Market Access) annually. EMMA is a service of the Municipal Securities Rulemaking Board which is the official repository for information on virtually all municipal bonds providing free access to official disclosures and other data about the municipal securities market.

The revenue recovery ratio measures the cash available from operating revenues to the current debt obligation of interest and principal payments. A ratio greater than 1 means there is sufficient funds to cover the annual debt payment. CCRTA began repaying the debt in 2014 and since then has maintained a revenue recovery ratio greater than 1.