Press Release|Public Finance
KBRA Affirms AAA Rating, Stable Outlook on the New Mexico Finance Authority State Transportation Revenue Bonds (State Transportation Commission - Senior Lien and Subordinate Lien)
29 Apr 2025 | New York
KBRA affirms the long-term rating of AAA on the New Mexico Finance Authority State Transportation Revenue Bonds (State Transportation Commission - Senior Lien and Subordinate Lien). The Outlook on both liens is Stable.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- Robust coverage of maximum annual debt service from a diverse and stable array of Pledged Revenues.
- All Senior Lien and Subordinate Lien bonds are to be fully amortized by 2031.
- The Indenture’s strict Additional Bonds Test protects against overleveraging. Furthermore, other than refunding issuance, no additional Senior Lien or Subordinate Lien debt issuance is currently authorized under the Act.
Credit Challenges
- The bonds are subject to the periodic risk of non-reauthorization of FAHP funding. The current authorization is set to expire September 30, 2026. This reauthorization risk is mitigated, however, by the stability and diversity of the State Revenues component of Pledged Revenues.
- The state’s economic dependence upon the energy sector may present resource base vulnerabilities over the long term. Further, state wealth and income metrics are below the national average.
Rating Sensitivities
For Upgrade
- Not Applicable
For Downgrade
- Pronounced decline in the collection of Pledged Revenues and resultant coverage levels.
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