KBRA Assigns AA- Rating, Stable Outlook to Triborough Bridge and Tunnel Authority Subordinate Revenue Bond Anticipation Notes, Series 2025A
27 Jan 2025 | New York
KBRA assigns a long-term rating of AA- to the Triborough Bridge and Tunnel Authority ("TBTA") Subordinate Revenue Bond Anticipation Notes, Series 2025A. The Outlook is Stable. The long-term rating on the three-year notes reflects the TBTA’s role as one of the nation’s largest toll systems and a provider of highly essential transportation infrastructure to the regional New York City economy. Generally low demand volatility, limited competition, and the TBTA’s full toll setting autonomy, bolstered by the State’s non-impairment covenant under the TBTA Act, further underpin the rating.
Concurrently, KBRA affirms the AA rating and Stable Outlook on TBTA General Revenue Bonds, and the AA- rating and Stable Outlook on TBTA Subordinate Revenue Bonds.
Key Credit Considerations
The rating was assigned because of the following key credit considerations:
Credit Positives
- The TBTA Board has independent rate-setting authority and a proven track record of implementing required rate increases. Toll rates are established to generate operating surpluses used to subsidize the MTA’s mass transit system.
- TBTA bridges and tunnels are highly essential to the regional transportation network, providing vital links that support economic activity across the nation’s most heavily populated service area.
- Historical demand has been generally unaffected by biennial toll increases. Vehicular traffic has fully recovered from pandemic impacts.
Credit Challenges
- Uncertainties persist regarding the impact of the recently implemented Congestion Pricing Program on traffic volumes and toll revenues at TBTA facilities that connect motorists to New York City’s Central Business District.
- Traffic demand, while historically inelastic, may be impacted by further toll rate increases.
- There is no debt service reserve funding requirement.
Rating Sensitivities
For Upgrade
- Growth in traffic volume which, together with planned toll increases, results in a substantial and sustained increase in net revenues and in General Revenue (Senior) and Combined debt service coverage.
For Downgrade
- A downgrade of the long-term TBTA General Revenue Bond and Subordinate Revenue Bond rating during the pendency of the Series 2025A BANs.
- A trend of significant decline in traffic volume, increase in operating expenses, and/or higher than forecast leverage that results in a prolonged decline in General Revenue (Senior) and Combined debt service coverage.
To access ratings and relevant documents, click here.