Metropolitan Transportation Authority, NY Revenue Bond Rating Lowered To 'A-' On Pandemic's Effects

SAN FRANCISCO (S&P Global Ratings) March 24, 2020--S&P Global Ratings lowered its long-term rating and underlying rating to 'A-' from 'A' on the Metropolitan Transportation Authority (MTA, or the MTA), N.Y.'s transportation revenue bonds (TRBs) outstanding and assigned its 'A-' long-term rating to the MTA's proposed $800 million series 2020C TRBs. At the same time, we lowered our issuer credit rating to 'A-' from 'A' on the MTA, and our stand-alone credit profile (SACP) to 'a-' from 'a' on the MTA. The outlook, where applicable, is negative.
We also took the following rating actions on the MTA's various variable-rate TRBs outstanding with enhancement by letters of credit, where the long-term rating reflects the application of joint criteria assuming low correlation:
  • We lowered our dual rating to 'AA/A-1+' from 'AA+/A-1+' on the MTA's series 2012G-2 and 2002G-1G variable rate TRBs, with enhancement by letters of credit from Toronto Dominion Bank, and on the MTA's series 2015E-1 and 2015E-5 variable-rate TRBs, with enhancement by letters of credit from U.S. Bank N.A.
  • We lowered our dual rating to 'AA/A-1' from 'AA+/A-1' on the MTA's series 2005E-2 and 2015E-3 variable-rate TRBs, with enhancement by letters of credit from Bank of America N.A., and on the MTA's series 2012A-2 variable-rate TRBs, with enhancement by a letter of credit from Bank of Montreal,
  • We affirmed our 'AA/A-1' dual rating on various other variable-rate TRBs with enhancement by letters of credit from Barclays Bank PLC, PNC Bank, N.A., MUFG Bank Ltd., and Landesbank Hessen-Thueringen Girozentrale.
Finally, we affirmed our 'SP-1' short-term rating on the MTA's previously issued TRB anticipation notes (BANs).
The series 2020C TRB proceeds will be used to refinance outstanding BANs.
"The rating action and negative outlook on the TRBs reflect our view of financial challenges posed by the COVID-19 pandemic, including its impact on ridership and traffic, likely impact to subsidies and taxes, and prospects for permanent negative dislocation of passenger and traffic volume, compounding the downward trend of recent years," said S&P Global Ratings credit analyst Paul Dyson.
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