Executive Summary
This document describes KBRA’s rating methodology as it pertains to notes issued by public sector entities and payable from the cash flow of governments in the United States. These obligations mature, in general, within twelve months of issuance and are usually secured by a specific pledged revenue stream, i.e. a specific property tax levy or state aid payments to be received in a specific year These instruments include tax anticipation notes (TANs), revenue anticipation notes (RANs) and tax and revenue anticipation notes (TRANs). Repayment of these obligations is contingent on the timing and adequacy of pledged revenues. KBRA may require both historic and projected cash flow statements to review these obligations and assign a rating. For the purposes of this Methodology, pledged revenue is defined as the funds legally available to pay principal and interest on the notes when due and reflected in the cash flow statements. Repayment of other forms of short term…