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DART: The Feel-Good Bond Sale of the Year! Or Not.

Schutze and I just got through discussing a Bond Buyer story from this morning that says Dallas Area Rapid Transit's forthcoming $740 million sales-tax revenue bond sale is getting a couple of thumbs up and a couple of thumbs down. On the one hand, you have Standard & Poor's raising DART's rating "to its coveted AAA, higher than even the city of Dallas," notes the subscription-only article. Writes the S&P analyst: "We believe that DART's service area's broad and diverse retail base will provide resilience in any economic cycle."

Then you have Fitch Ratings downgrading DART's rating, from AA to AA-minus -- which still doesn't sound bad, till you read the analyst's analysis. Said the report, the downgrade "reflects the increased costs associated with DART's light-rail build-out, potential cost increases to the remaining projects through 2018, the need to issue an additional $529 million in debt beyond the $2.9 billion voter-authorized limit, and a move to debt with a 40-year maturity, all of which indicate more limited financial flexibility." DART, of course, likes the S&P rating. Because, Jim said this morning, the Fitch Ratings rating is "a doubt, a cloud." Now, perhaps, would be a good time to remind you of DART's fiscal funkiness?

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