(Bloomberg) -- New York’s Metropolitan Transportation Authority boosted its short-term borrowing capacity by $2 billion to help raise cash as the largest U.S. mass-transit provider loses millions of dollars in revenue every week because of the spread of the coronavirus.
The MTA’s board Wednesday approved increasing to $3 billion from $1 billion its limit on how much it can borrow from commercial banks for near-term liquidity. The agency last week tapped $1 billion of such lending from JPMorgan Chase Bank NA and Bank of America NA and plans to borrow more from the institutions.
“The impacts of the pandemic on MTA’s financial condition are clearly severe and may deteriorate further,” Bob Foran, the MTA’s chief financial officer, said during the meeting.
The MTA on Wednesday began reduced service throughout its network of subways, buses and commuter lines. That decision follows a plunge in ridership this month as Governor Andrew Cuomo has ordered most businesses closed, as people are working from home, and as schools have shut their doors and cultural and sporting venues are dark.
The MTA is losing an estimated $125 million a week in fare box and bridge and toll revenue, Foran said. The agency has asked federal lawmakers for $4 billion to help cover the drop in fare box revenue and an increase in cleaning and disinfecting expenses.
MTA’s ridership decline is staggering, with a 94% drop on Metro-North Railroad and 90% for Long Island Railroad. Subway usage is down 87% and bus ridership has fallen more than 60%.
The MTA has about $3.8 billion of liquidity resources, including the $1 billion in lines of credit from JPMorgan and Bank of America, a cash balance of $1.2 billion and internal flexible funds of $1.2 billion, according to Foran.
The agency has $1 billion of notes maturing May 15 that it could payoff with existing cash or roll over into new debt, according to Moody’s Investors Service, which is reviewing the agency for a potential downgrade.
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