KBRA assigns a long-term rating of AA+ to the Massachusetts Bay Transportation Authority Subordinated Sales Tax Bonds 2024 Series A (USDOT Loan) Widett Circle Preservation of Right-of-Way and Site Preparation Project (RRIF 2025-0053). KBRA additionally affirms the long-term rating of AAA for the Authority's Senior Sales Tax Bonds. The rating Outlook is Stable.

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

• Flow of funds requiring that pledged revenues must be used to pay debt service before being made available for other purposes insulates bondholders form MBTA operations.
• Pledged revenues provide strong coverage of both senior and combined sales tax bond MADS with residual amounts providing a substantial source of recurring financial support for capital and operating needs.
• Pledged revenue volatility is limited by the base revenue amount, an inflation-adjusted floor for pledged sales tax receipts, which at $1.16 billion for FY 2024 provides coverage of 3.67x senior and 2.51x combined pro forma MADS.
• Stable demographic trends and favorable socio-economic characteristics of tax base support growth and stability of pledged receipts.

Credit Challenges

• Pledged revenues have some sensitivity to economic cycles.

Rating Sensitivities

For Upgrade

• Not applicable.

For Downgrade

• A significant decline in debt service coverage due to very large increases in sales tax bond leverage accompanied by significant and prolonged deterioration in the sales tax base.

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Methodologies

• Public Finance: U.S. Special Tax 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.

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: 1007197

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