KBRA Assigns AA+ Rating to TBTA Payroll Mobility Tax Senior Lien Green Bonds; Outlook Stable
3 Oct 2023 | New York
KBRA assigns a long-term rating of AA+ with a Stable Outlook to the Triborough Bridge and Tunnel Authority (MTA Bridges and Tunnels) Payroll Mobility Tax Senior Lien Green Bonds, Series 2023C (Climate Bond Certified). Concurrently, KBRA affirms the long-term rating of AA+ with a Stable Outlook on TBTA's outstanding Payroll Mobility Tax Senior Lien Bonds.
The short-term rating of K1+ on the TBTA's outstanding Payroll Mobility Tax Bond Anticipation Notes is also affirmed, as is the short-term rating of K1+ on the Metropolitan Transportation Authority's (MTA's) outstanding Payroll Mobility Tax Bond Anticipation Notes.
Key Credit Considerations
The rating was assigned because of the following key credit considerations:
- 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 and diverse 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.
- Mobility Tax Receipts are subject to economic volatility.
- ATA Receipts have declined at a compound annual rate of 3.0% from 2017 through 2022. In KBRA’s view, revenue growth from the surcharge on metered taxicab pickups, a component of ATA Receipts, is likely to remain challenged due to competition from ride-share companies.
- 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.
- A sustained economic downturn that results in a significant reduction in Pledged Revenues and debt service coverage.
To access rating and relevant documents, click here.