KBRA Assigns AA+ Rating, Stable Outlook to Triborough Bridge and Tunnel Authority Payroll Mobility Tax Senior Lien Refunding Green Bonds, Series 2024C (Climate Bond Certified)
14 Jun 2024 | New York
KBRA has assigned a long-term rating of AA+ to the Triborough Bridge and Tunnel Authority's ("TBTA's") Payroll Mobility Tax ("PMT") Senior Lien Refunding Green Bonds, Series 2024C (Climate Bond Certified). The Outlook is Stable. Concurrently, KBRA affirms the AA+ rating and Stable Outlook on parity TBTA PMT Senior Lien Bonds and affirms the short-term ratings of K1+ on TBTA PMT Bond Anticipation Notes and K1+ on MTA PMT Bond Anticipation Notes.
The long-term rating reflects the strength of Pledged Revenues, which include a first lien on Mobility Tax Receipts and MTA Aid Trust Account Receipts ("ATA Receipts") deposited to the Obligations Trust Estate and pledged pursuant to the TBTA PMT Resolution.
Key Credit Considerations
The rating was assigned because of the following key credit considerations:
Credit Positives
- Pledged Revenues provide ample coverage of pro-forma PMT MADS, which occurs in CY 2040.
- Mobility Tax and ATA Receipts are derived from a broad, diverse, and resilient employment base.
- Senior lien PMT obligations benefit from a 2.25x ABT based on historical pledged revenues and pro-forma MADS. The conservative ABT insulates the Bonds against overleveraging of the PMT lien.
Credit Challenges
- Mobility Tax Receipts are subject to economic volatility.
- ATA Receipts have been flat since 2018. In KBRA’s view, revenue growth from the surcharge on metered taxicab pickups, a component of ATA receipts, is likely to be limited due to competition from ride-share companies.
Rating Sensitivities
For Upgrade
- An increase in current Payroll Mobility Tax rates or on the number of employers subject thereto that allows MADS coverage from Pledged Revenues to remain comfortably above the 2.25x ABT even as additional PMT obligations are issued.
For Downgrade
- A sustained economic downturn that results in significantly reduced in Pledged Revenues and debt service coverage.
To access rating and relevant documents, click here.