Press Release|Public Finance
KBRA Assigns AA Rating to Washington Metropolitan Area Transit Authority (DC) Second Lien Dedicated Revenue Bonds, Series 2023A; Affirms AA+ Rating for Senior Lien Bonds; Outlook is Stable
7 Jul 2023 | New York
KBRA assigns a long-term rating of AA to the Washington Metropolitan Area Transit Authority Second Lien Dedicated Revenue Bonds, Series 2023A (Sustainability Bonds – Climate Bond Certified). KBRA additionally affirms the long-term rating of AA+ for the Authority's senior lien Dedicated Revenue Bonds outstanding. The rating Outlook is Stable.
Key Credit Considerations
The rating actions reflect the following key credit considerations:
Credit Positives
- The signatory jurisdictions have an uninterrupted 47-year history of payment of their annual commitments.
- Strong credit characteristics of signatory jurisdictions supports appropriation funding mechanism.
- Essentiality of mass transit to metropolitan Washington D.C. area and established history of operating and capital support by these jurisdictions.
- Substantial coverage of debt service requirements.
Credit Challenges
- Dedicated revenue sources may be adversely affected by economic cycles and exogenous events.
- Signatories are allowed to proportionally reduce their dedicated capital funding contribution if another does not pay the full amount of their obligations.
Rating Sensitivities
For Upgrade
- Improved credit position of signatory jurisdictions.
For Downgrade
- Weakened credit position of one or more of the signatories.
- Failure of one or more signatories to make its committed appropriation in full.
To access rating and relevant documents, click here.