Press Release|Public Finance
KBRA Affirms AAA Rating for Commonwealth of Massachusetts – Commonwealth Transportation Fund Revenue Bonds
29 Aug 2024 | New York
KBRA affirms the long-term rating of AAA with a Stable Outlook for the Commonwealth of Massachusetts – Commonwealth Transportation Fund (CTF) Revenue Bonds.
Key Credit Considerations
The rating was affirmed because of the following key credit considerations:
Credit Positives
- Very broad and resilient nature of CTF pledged revenues which, to date, have generated more than 4x coverage of maximum annual debt service.
- Extensive legal protections that collectively and effectively insulate pledged revenues from Commonwealth budget operations.
- The Commonwealth’s diverse, wealthy, and growing economy.
Credit Challenges
- The motor fuels portion of pledged revenues (~47.3% of FY23 pledged revenues) is economically sensitive and vulnerable to declines during recessionary periods.
- Longer term, structural shifts in fuel consumption patterns possibly pressuring pledged revenues.
Rating Sensitivities
For Upgrade
- Not applicable at AAA rating level.
For Downgrade
- An unlikely scenario where there was a substantial and sustained decline in pledged revenues.
To access rating and relevant documents, click here.