KBRA Assigns A Rating to NJTTFA Transportation Program Bonds 2024 Series AA (Tax-Exempt) and 2024 Series BB (Federally Taxable); Affirms A+ Rating for New Jersey GO and A Rating for Related Appropriation Bonds
13 Aug 2024 | New York
KBRA assigns a long-term rating of A to the New Jersey Transportation Trust Fund Authority (NJTTFA) Transportation Program Bonds, 2024 Series AA (Tax-Exempt) and Transportation Program Bonds, 2024 Series BB (Federally Taxable).
KBRA additionally affirms the long-term rating of A+ for the State of New Jersey's General Obligation Bonds.
Lastly, KBRA affirms the long-term rating of A for the following bonds:
New Jersey Transportation Trust Fund Authority
- Transportation Program Bonds
- Transportation Program Notes (Fixed Rate)
New Jersey Economic Development Authority (NJEDA)
- Lease Revenue Bonds
New Jersey Education Facilities Authority (NJEFA)
- Revenue Bonds, Higher Education Capital Improvement Fund Issues
The rating Outlook for each rated obligation is Stable.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- State economic base is large and diverse. Per capita personal income is the fourth highest in the nation.
- Governor has broad executive powers under the New Jersey Constitution to adjust the budget and reduce spending to maintain budget balance.
Credit Challenges
- One-time federal revenues bolstered finances through the pandemic, but reserves are now being drawn down.
- Unfunded pension and OPEB liabilities are very high relative to personal income and gross state product.
Rating Sensitivities
For Upgrade
- Track record of consistently balanced operations that does not rely upon non-recurring revenues, provides full actuarially determined pension contributions, and supports maintenance of substantial operating reserves.
- Economic growth patterns that meet or exceed regional and national trends.
For Downgrade
- A resumption of the pattern of underfunding full actuarial pension contributions.
- A significant diminution of reserves to balance financial operations to a level no longer consistent with the rating level.
To access rating and relevant documents, click here.