ATLANTA -- Moody's Investors Service yesterday upgraded the Metropolitan Atlanta Rapid Transit Authority's first lien sales tax revenue bonds to A1 from A, citing the authority's strong management, improved finances, and manageable capital plans.

The upgrade affects $766 million of outstanding debt.

Moody's also assigned an initial AI rating to $250 million of the authority's second lien sales tax bonds, which includes $100 million scheduled for sale today.

Atlanta's rapid transit agency serves not only the city proper, but also surrounding Fulton and DeKalb counties, the two most populous counties in the state.

"The system's finances are well managed and have improved as the area's economy has emerged from the recent recession," the rating agency said in an accompanying report. "Sales tax collections have grown at a strong pace in the past two years, and as a result, debt service coverage continues at a comfortable level."

In addition, the rating agency noted that because the system has completed its initial construction, it can look forward to a manageable capital plan next year that includes relatively modest borrowing.

Expected capital spending in fiscal 1995 totals $225 million, half of which will be covered by federal and state grants and the Atlanta Committee for the Olympics.

Of the total, $128 million will be committed to a program to build three new stations on the authority's north line. About $95 million will be used to replace and renovate capital equipment, with the remaining $2 million allotted to transit planning.

Moody's also noted that operations have been supported by fare increases, the most recent a 25% increase last year.

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