KBRA Affirms AA+ Rating for San Francisco Bay Area Rapid Transit District's Senior Sales Tax Revenue Bonds and AA Rating for Junior Lien Sales Tax Revenue Obligations (TIFIA Loan); Stable Outlook
26 Jun 2025 | New York
KBRA affirms a long-term rating of AA+ to the San Francisco Bay Area Rapid Transit District, CA's ("the District") outstanding Senior Lien Sales Tax Revenue Bonds. In addition, KBRA affirms a long-term rating of AA to the District's Junior Lien Sales Tax Obligation (TIFIA loan). The rating Outlook is Stable.
The ratings reflect the District's gross revenue pledge with collections by the California Department of Tax and Fee Administration (CDTFA), a broad sales tax revenue base, continued favorable sale tax revenue trend, and strong historic and proforma debt service coverage (DSC), both for the senior and junior lien obligations. The ratings also recognizes the underlying strength of the metropolitan San Francisco economy, which benefits from high wealth levels and a diverse commercial/industrial base.
Key Credit Considerations
The ratings were affirmed because of the following key credit considerations:
Credit Positives
- Pledged sales tax revenues provide ample pro forma coverage of maximum annual debt service (MADS) requirements for the sales tax revenue bonds and the junior lien TIFIA loan.
- Sales tax revenues are generated by sizable, diverse, and resilient economic base.
- Gross revenue pledge with sales taxes collected by CDTFA and directly deposited with Trustee.
Credit Challenges
- Bonds are solely secured by sales taxes, which may at times be adversely affected by economic factors.
- Although unlikely, possible legislative or electorate changes to the transactions and items subject to the State’s general sales tax that negatively affects the District's sale tax revenues.
Rating Sensitivities
For Upgrade
- Sustained and material improvement in the sales tax revenue trend which boosts debt service coverage.
- Significant secular economic downturn or material outmigration that results in a sharp reduction in the pledged sales tax revenues and debt service coverage.
To access ratings and relevant documents, click here.