KBRA Assigns K1+ Short-Term Rating to Triborough Bridge and Tunnel Authority (TBTA) Payroll Mobility Tax (PMT) Bond Anticipation Notes, Subseries 2025B-1 and AA+ Long-Term Rating, Stable Outlook to TBTA PMT Bond Anticipation Notes, Subseries 2025B-2

NEW YORK--(BUSINESS WIRE)--KBRA assigns a short-term rating of K1+ to the Triborough Bridge and Tunnel Authority (TBTA) Payroll Mobility Tax (PMT) Bond Anticipation Notes, Subseries 2025B-1 and a long-term rating of AA+ with a Stable Outlook to the TBTA PMT Bond Anticipation Notes, Subseries 2025B-2.

Concurrently, KBRA affirms the long-term rating of AA+ with a Stable Outlook on outstanding TBTA PMT Senior Lien Bonds and certain outstanding TBTA PMT Bond Anticipation Notes, and affirms the short-term rating of K1+ on certain outstanding TBTA PMT Bond Anticipation Notes.

Key Credit Considerations

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

Credit Positives

• Pledged Revenues provide ample coverage of pro-forma PMT MADS, which occurs in CY 2040.
• The breadth and diversity of the MCTD wage base has contributed to the stability of Mobility Tax and ATA Receipts throughout economic cycles.
• A conservative 2.25x ABT based on historical pledged revenues and pro-forma MADS insulates against overleveraging of the PMT senior lien.

Credit Challenges

• There is the potential for increased reliance on the PMT credit to fund the MTA capital plan, particularly if federal funding is reduced or congestion pricing is repealed. Should PMT debt issuance exceed financial plan projections, maintenance of PMT debt service coverage at currently robust levels would require an increase in the rate of the PMT.
• Mobility Tax Receipts are subject to economic volatility.
• ATA Receipts have not recovered to pre-pandemic levels. In KBRAs view, revenue growth from the surcharge on metered taxicab pickups is likely to be limited due to competition from ride-share companies.
• Inclusive of the proposed issuance, BANs will compromise $1.5 billion, or approximately 13.7% of outstanding PMT obligations, potentially exposing MTA to a not insignificant degree of unhedged market interest rate risk upon takeout.

Rating Sensitivities

For Upgrade

• An increase in current PMT rates or the wage base subject thereto that allows MADS coverage from Pledged Revenues to remain comfortably above the 2.25x ABT even as additional PMT obligations are issued.

For Downgrade

• An increase in PMT debt issuance necessitated by stress in other planned capital funding sources, resulting in a decline in MADS coverage to the ABT level.
• A decrease in current PMT rates or the wage base subject thereto that causes a material, sustained decline in MADS coverage from Pledged Revenues.
• Although unlikely, a sustained economic downturn that results in significantly reduced Pledged Revenues and debt service coverage.

To access ratings and relevant documents, click here.

Methodologies

• Public Finance: U.S. Special Tax 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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