The 'AA-' rating on Kentucky Asset Liability Commission's $140 million federal highway trust fund project grant anticipation revenue notes (GARVEES) series 2005, issued on behalf of the Kentucky Transportation Cabinet, is based on the strengths of the Kentucky GARVEE program. More specifically, the rating reflects the following credit strengths: A strong additional bonds test that requires that historic federal aid receipts equal 4x maximum annual debt service (MADS) on outstanding and proposed bonds; Solid pro forma MADS coverage of 10.3x by actual 2004 federal aid receipts, and 4.0x coverage by the lowest historic year of federal aid receipts (1992); A strong Federal Highway Administration (FHWA) memorandum of agreement that includes specific FHWA approval of each of the GARVEE bond projects
