Metropolitan Transportation Authority, NY – Hudson Yards Trust Surveillance Report
Rating Summary
The rating reflects the security features of the Hudson Rail Yards (“HRY”) Trust Obligations (“the Obligations”), which include the Metropolitan Transportation Authority’s (“MTA’s”) Interest Reserve Fund replenishment requirements, a flexible amortization schedule that allows a combination of ground rent payments, the Interest Reserve Fund, and/or proceeds from purchase options to be sufficient to pay interest and amortize principal under various development scenarios and timelines, and the seniority of ground rent payments relative to any mortgage obligations associated with ground tenants’ development investments. Counterbalancing these strengths are the risks associated with the scale and complexity of the remaining construction and development projects as well as the HRY Project’s sensitivity to changes in the real estate markets.
HRY Trust Obligations were issued by the MTA to monetize its rights to future monthly rent payments under 99-year ground leases on parcels…
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