KBRA Assigns AA Rating to the Washington Metropolitan Area Transit Authority (WMATA) Second Lien Dedicated Revenue Bonds, Series 2025A; Outlook Stable

NEW YORK--(BUSINESS WIRE)--KBRA assigns a long-term rating of AA to the Washington Metropolitan Area Transit Authority (WMATA) Second Lien Dedicated Revenue Bond, Series 2025A. Concurrently, KBRA affirms the AA rating on outstanding parity Second Lien Dedicated Revenue Bonds, and affirms the AA+ rating on outstanding Dedicated Revenue Bonds (Senior Lien). The Outlook is Stable.

Key Credit Considerations

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

Credit Positives

• The signatories have an uninterrupted 49-year history of full payment of annual operating and capital funding commitments to WMATA.
• The strong credit characteristics of the signatories and the essentiality of mass transit to the metropolitan Washington, D.C. area support the appropriation funding mechanism.

Credit Challenges

• The signatories may proportionally reduce their dedicated capital funding contribution if another does not pay their obligations in full.
• A portion of Dedicated Capital Funding Revenues are economically sensitive.
• Absent new or increased revenues, limited remaining Dedicated Revenue Bond debt capacity has the potential to delay execution of the Authority’s FY 2026-FY 2031 CIP, which includes essential state of good repair projects.

Rating Sensitivities

For Upgrade

• Improvement in the already strong and stable credit position of one or more of the signatories.
• Substantive near-term progress by the Authority and its jurisdictional partners in the identification of new and/or increased recurring capital funding.

For Downgrade

• Materially weakened credit position of one or more of the signatories.
• Failure of one or more signatories to make its committed operating and capital appropriations in full.
• Absence of near-term progress by the Authority and its jurisdictional partners in the identification of new and/or increased recurring capital funding.

To access ratings and relevant documents, click here.

Methodologies

• Public Finance: U.S. State Annual Appropriation Obligation 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.

Doc ID: 1010038