KBRA Affirms Washington Metropolitan Area Transit Authority, DC Dedicated Revenue Bonds at AA+; Second Lien Dedicated Revenue Bonds at AA; Outlook Stable
18 Jun 2026 | New York
KBRA affirms the long-term rating of the Washington Metropolitan Area Transit Authority's Dedicated Revenue Bonds at AA+, and affirms the long-term rating of the Second Lien Dedicated Revenue Bonds at AA. The Outlook on all obligations is Stable.
The ratings remain anchored by the strong credit fundamentals of the District of Columbia, the State of Maryland, and the Commonwealth of Virginia (the “Signatories”) which, pursuant to their respective Dedicated Capital Fund statutes, Dedicated Funding Grant Agreements, and the Washington Metropolitan Area Transit Authority (“WMATA” or “Metro”) Compact, provide WMATA with a dedicated source of annual revenue for safety and state of good repair capital projects. Counterbalancing these strengths is the annual appropriation nature of the pledged Dedicated Capital Funding Revenues backing timely debt repayment. KBRA makes a rating distinction between the Dedicated Revenue Bonds and the Second Lien Dedicated Revenue Bonds (the active lien) to reflect the subordinate payment priority of the Second Lien Bonds.
The Signatories' long-standing commitment to WMATA, dating back to its establishment, together with the essentiality of mass transit services to the regional economy, provides a strong base of political support for both Metro’s capital program and ongoing operations. In KBRA’s view, such commitment and essentiality support the expectation that the Signatories will continue to appropriate Dedicated Capital Funding Revenues for WMATA capital programs.
Key Credit Considerations
Credit Positives
- 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.
- Uninterrupted track record of full and timely payment of Dedicated Capital Funding by the Signatories and the annual WMATA operating subsidy by the Participating Jurisdictions.
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 WMATA’s FY 2027-FY 2032 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.
- Final enactment and reliable implementation of new, recurring, indexed capital funding by DC, Maryland, and Virginia, in support of Dedicated Revenue or Second Lien borrowing capacity.
For Downgrade
- Materially weakened credit position of one or more of the Signatories.
- Weakening appropriation support from any Signatory for Dedicated Capital Funding Revenues, or failure of one or more Participating Jurisdictions to make committed operating or capital subsidy payments in full.
- Failure to enact the DMVMoves or comparable funding package in time to avoid exhausting WMATA’s debt capacity.
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