KBRA Releases Report Affirming AA Rating on the MTA's Transportation Revenue Bonds; Outlook is Stable

On October 31, 2023, KBRA affirmed the long-term AA rating and Stable Outlook on the Metropolitan Transportation Authority's (MTA's) outstanding Transportation Revenue Bonds. The rating reflects the continued, gradual post-pandemic recovery in subway, bus and commuter rail ridership, and MTA's significantly improved operating budget, which, per its July Financial Plan 2024-2027 (the "JFP"), is balanced annually through 2027 with the resolution of previously projected operating deficits totaling $6.535 billion.

The rating further reflects the strength of the gross pledge of Transportation Revenue Bond (TRB) revenues received by the TRB trustee and used to meet pro-rata monthly debt service requirements before being released for operations. Additionally, New York State's recent actions to de-risk MTA's operating budget through the elimination of projected Plan Period deficits highlights the essentiality of the MTA's transportation assets to the future of the New York metropolitan area and the state in our view. Somewhat offsetting these strengths is the Authority's high fixed cost burden, which remains an impediment to ongoing, structurally balanced operations.

The MTA has identified aging infrastructure, climate change, and evolving ridership patterns as key long-term challenges that will require extensive capital investment. Existing leverage is high; however, dedicated taxes and revenues from the to-be-implemented Central Business District Tolling Program are expected to support the MTA's most critical long-term capital plan initiatives.

To access rating and relevant documents, click here.

Click here to view the report.