KBRA assigns a long-term rating of AA with a Stable Outlook to the Metropolitan Transportation Authority (MTA) Transportation Revenue Refunding Green Bonds, Series 2024B (Climate Bond Certified). Concurrently, KBRA affirms the long-term rating of AA with a Stable Outlook on the MTA’s outstanding Transportation Revenue Bonds.

The long-term rating continues to reflect the continued, gradual post-pandemic recovery in the MTA’s transit and commuter rail ridership, and its improved operating budget, which remains balanced, though now only through 2026, with deficits of $428 million and $469 million projected in 2027 and 2028, respectively. In comparison, the previous financial plan had been balanced annually through 2027. The essentiality of MTA’s transportation infrastructure to the broad, and nationally significant New York City metropolitan area economy was also considered in the rating.

The Stable Outlook reflects our expectation of continued strong debt service coverage from the Transportation Resolution gross revenue pledge. In the temporary or permanent absence of congestion pricing revenues, we anticipate that the MTA will identify sufficient funding from a combination of gross revenues, dedicated taxes, direct City and State contributions, and federal grants to, at a minimum, address a prioritized list of critical state of good repair projects vital to safe system operations and a further recovery in ridership.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

• The gross revenue pledge supports robust debt service coverage. Sound liquidity and reserves provide adequate operating flexibility.
• New York State’s 2024 actions to de-risk MTA’s operating budget are credit positive.
• MTA’s transportation assets serve over 15 million people and are essential to the future of the New York metropolitan area.

Credit Challenges

• Aging infrastructure, climate change, and evolving ridership patterns are long-term challenges requiring extensive capital investment.
• Existing leverage is high, and funding of long term capital program initiatives, originally planned to have been supported by CBDTP revenues, is now uncertain.
• An exceptionally high fixed cost burden, including contractually required labor-related obligations and debt service, remains an impediment to ongoing, structurally balanced operations.

Rating Sensitivities

For Upgrade

• Delivery of critical Capital Program elements, including state-of-good-repair projects, with maintenance of strong debt service coverage from pledged Transportation Revenues.

For Downgrade

• The reappearance of significant unfunded deficits during the Plan Period.
• A sustained decline in paid ridership.
• In addressing the remaining Capital Program funding gap, incremental reliance on TRB issuance that strains the operating and/or debt service budgets would be viewed as a negative credit factor.

To access rating and relevant documents, click here.

Methodologies

• Public Finance: U.S. Public Toll Roads, Bridges & Tunnels Revenue Bond Rating Methodology
• ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Only those ratings on securities issued by this Issuer that also are denoted on the Security Ratings tab for this Issuer on KBRA.com as “endorsed” by Kroll Bond Rating Agency Europe Limited into the European Union and/or by Kroll Bond Rating Agency UK Limited into the UK are covered by the disclosures set forth in this press release and the corresponding Information Disclosure Form. No other ratings on issuances by this Issuer have been endorsed into the European Union or the UK, and the disclosures set forth herein and in the corresponding Information Disclosure Form are inapplicable to those ratings and may not be used for regulatory purposes by European Union or UK investors in these securities.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1006351

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