DALLAS -- Moody's Investors Service last week upgraded to A1 from A $38.7 million of uninsured sales tax revenue bonds sold by the Denver Regional Transportation District.

The action comes more than three years after Moody's cut the rating one notch, to single-A, in April 1988 because of concern over the possibility of a competing transit authority and a weakening economy.

The upgrade does not affect the Aaa rating on the remaining $42.9 million of sales tax revenue bonds insured by Financial Guaranty Insurance Co.

Ditmar Kopf, senior analyst for Rocky Mountain regional ratings at Moody's, said the upgrade was a result of the lack of legislative uncertainty over the future of the district, an improved economy in the six-county region served by the district, and a sharply reduced capital program.

"The political climate has calmed down a little bit," he said.

In its two-page statement, Moody's noted that a commission to study the creation of a competing mass transit agency -- which would have been funded in part by diverting some of the district's 0.6% sales tax levy -- has expired.

It also noted that the economy has improved.

"Continued growth in excise tax collections combined with increasing ridership have strengthened the district's financial operations and contribute to strong debt service coverage," it said.

Mr. Kopf also said the authority scaled back its five-year capital program from a $630.2 million plan to finance a regional light rail system to a $256.9 million plan to pay for a light rail demonstration project that is not expected to require bond financing.

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