KBRA Assigns AA+ Rating, Stable Outlook to Triborough Bridge and Tunnel Authority Payroll Mobility Tax Senior Lien Refunding Bonds, Series 2026A

NEW YORK--(BUSINESS WIRE)-- KBRA assigns a long-term rating of AA+ to the Triborough Bridge and Tunnel Authority Payroll Mobility Tax ("PMT") Senior Lien Refunding Bonds, Series 2026A.

Concurrently, we affirm the long-term ratings on outstanding Senior Lien PMT Bonds and certain outstanding PMT Bond Anticipation Notes issued with final maturities of greater than three years. For those PMT Bond Anticipation Notes issued with a final maturity of less than three years, KBRA affirms the short-term rating of K1+.

The long-term rating reflects the ample debt service coverage provided by Mobility Tax receipts and MTA Aid Trust Account receipts, (collectively, ?Pledged Revenues?), the broad, diverse and resilient employment base from which Pledged Revenues are derived, and strong bondholder protections, which include a 2.25x historical pro-forma additional bonds test.

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

• Pledged Revenues provide ample coverage of pro-forma maximum annual debt service.
• The breadth and diversity of the MCTD wage base has contributed to the stability of Mobility Tax 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on the PMT credit to fund the MTA capital plan, particularly if federal funding is reduced or congestion pricing is repealed.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 further increases 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, is likely to be limited due to competition from ride-share companies.
• PMT Bond Anticipation Notes (?BANs?) presently comprise close to 14% of outstanding PMT obligations, potentially exposing MTA to a not insignificant degree of unhedged interest rate risk upon future takeout.

Rating Sensitivities

For Upgrade

• Mobility Tax rate levels and/or growth in the MCTD wage base which cause MADS coverage to remain comfortably above the 2.25x ABT even as additional PMT obligations are issued.

For Downgrade

• A decline in MADS coverage to the 2.25x ABT level.

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.

Doc ID: 1013650

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Source: Kroll Bond Rating Agency, LLC