Press Release|Public Finance
KBRA Assigns AAA Rating, Stable Outlook to the New Mexico Finance Authority State Transportation Revenue Refunding Bonds (State Transportation Commission - Senior Lien), Series 2024A
23 May 2024 | New York
KBRA has assigned a long-term rating of AAA to the New Mexico Finance Authority State Transportation Revenue Refunding Bonds (State Transportation Commission - Senior Lien), Series 2024. Concurrently, KBRA affirms the long-term rating of AAA on both outstanding parity Senior Lien State Transportation Revenue Bonds, and outstanding Subordinate Lien State Transportation Revenue Bonds. The Outlook on all bonds is Stable.
Key Credit Considerations
The rating was assigned because of the following key credit considerations:
Credit Positives
- Robust pro-forma coverage of maximum annual debt service from a diverse and stable array of Pledged Revenues.
- All Senior Lien and Subordinate Lien bonds are to be fully amortized by 2031.
- The Indenture’s strict Additional Bonds Test protects against overleveraging. Furthermore, other than refunding issuance, no additional Senior Lien or Subordinate Lien debt issuance is authorized under the Act.
Credit Challenges
- The bonds are subject to the periodic risk of non-reauthorization of FAHP funding. This risk is mitigated, however, by the stability and diversity of the State Revenues component of Pledged Revenues, and by the federal transportation contract authority distributed to state departments of transportation through formula programs.
- The state’s economic dependence upon the energy sector may present resource base vulnerabilities over the long term.
- State wealth and income metrics are below the national average.
Rating Sensitivities
For Upgrade
- Not Applicable
For Downgrade
- Pronounced decline in the collection of Pledged Revenues and resultant coverage levels.
To access rating and relevant documents, click here.