Press Release|Public Finance
View PDF

KBRA Affirms Ratings for Massachusetts Bay Transportation Authority Senior Sales Tax Bonds (AAA) and Subordinated Sales Tax Bonds (USDOT Loans) (AA+)

12 May 2026   |   New York

Contacts

KBRA affirms the long-term ratings for the Massachusetts Bay Transportation Authority Senior Sales Tax Bonds at AAA and Subordinated Sales Tax Bonds (USDOT Loans) at AA+. The rating Outlook is Stable.

Key Credit Considerations

The rating actions reflect the following key rating considerations.

Credit Positives

  • Flow of funds requiring that pledged revenues must be used to pay debt service before being made available for other purposes insulates bondholders from MBTA operations.
  • Pledged revenues provide strong coverage of both senior and combined sales tax bond MADS with residual amounts providing a substantial source of recurring financial support for capital and operating needs.
  • Pledged revenue volatility is limited by the base revenue amount, an inflation-adjusted floor for pledged sales tax receipts, which at $1.20 billion for FY 2025 provides coverage of 3.22x senior and 2.44x combined MADS.
  • Stable demographic trends and favorable socio-economic characteristics of tax base support growth and stability of pledged receipts.

Credit Challenges

  • Pledged revenues have some sensitivity to economic cycles.

Rating Sensitivities

For Upgrade

  • Not applicable to senior sales tax bonds given AAA rating level. A rating upgrade is not anticipated for the Subordinated Sales Tax Bonds (USDOT Loans).

For Downgrade

  • A significant decline in debt service coverage due to very large increases in sales tax bond leverage accompanied by significant and prolonged deterioration in the sales tax base.

To access ratings and relevant documents, click here.

Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1014930