KBRA Assigns AA Rating, Stable Outlook to the MTA Transportation Revenue Refunding Green Bonds, Series 2025A (Climate Bond Certified)

NEW YORK--(BUSINESS WIRE)--KBRA assigns a long-term rating of AA with a Stable Outlook to the Metropolitan Transportation Authority (MTA) Transportation Revenue Refunding Green Bonds, Series 2025A (Climate Bond Certified). Concurrently, KBRA affirms the long-term rating of AA with a Stable Outlook on the MTA's outstanding Transportation Revenue Bonds.

The long-term rating reflects the continued, gradual post-pandemic recovery in MTA transit and commuter rail ridership, and an improved operating budget that remains balanced through 2026. The essentiality of MTA’s transportation infrastructure to the broad, and nationally significant New York City metropolitan area economy is a further rating consideration.

Countervailing credit factors include MTA’s aging and climate-vulnerable infrastructure, which requires ongoing and significant investment, evolving ridership patterns, and the Authority’s exceptionally high fixed cost burden, which we expect will remain an impediment to sustained structural balance over the long-term.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

• The gross revenue pledge supports robust debt service coverage. Sound liquidity and reserves provide adequate operating flexibility.
• MTA’s transportation assets serve over 15 million people and are essential to the economic well-being of the New York metropolitan area.

Credit Challenges

• Aging infrastructure, climate change resilience, and evolving ridership patterns are long-term challenges requiring extensive capital investment.
• Funding of long-term capital program initiatives, originally planned to have been supported by Congestion Pricing revenues, is once again uncertain.
• An exceptionally high fixed cost burden, including contractually required labor-related obligations and debt service, remains an impediment to ongoing, structurally balanced operations.

Rating Sensitivities

For Upgrade

• Delivery of critical Capital Program elements, including state-of-good-repair projects, with maintenance of strong debt service coverage from pledged Transportation Revenues.

For Downgrade

• The reappearance of significant unfunded deficits during the Plan Period.
• A sustained decline in paid ridership.
• In addressing the 2025-2029 Capital Program funding gap, incremental reliance on TRB issuance that strains the operating and/or debt service budgets would be viewed as a negative credit factor.

To access ratings and relevant documents, click here.

Methodologies

• Public Finance: U.S. Public Toll Roads, Bridges & Tunnels Revenue Bond Rating Methodology
• ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

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