KBRA assigns a long-term rating of AA to the Triborough Bridge and Tunnel Authority Real Estate Transfer Tax Revenue Bonds, Series 2025A (TBTA Capital Outlook Fund). The Outlook is Stable. The rating reflects KBRA's positive view of i) the non-appropriation pledge and statutory dedication of New York City Real Estate Transfer Tax ("RETT") receipts transferred monthly by the State Comptroller to the Central Business District Tolling Capital Lockbox Fund held by TBTA; ii) the sound legal and security provisions of the credit structure; iii) the solid, though volatile, trend of coverage of maximum annual debt service (capped at $150 million) over the four year timeframe of actual receipts; and iv) TBTA's statutory inability to file for bankruptcy protection, and the inability of creditors to file involuntary proceedings against TBTA during the pendancy of the Bonds. Counterbalancing these strengths are the lack of at least five years of historical RETT receipts, and the volatility of annual sales volumes and unit sales subject to the RETT.

Key Credit Considerations

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

Credit Positives

• Strong legal and security provisions adequately counterbalance the potential volatility of RETT receipts.
• To the extent that real estate sales prices continue to increase, the RETT will apply to a larger percentage of City residential sales, as well as to most non-residential sales. An estimated 25.6% of residential sales volume and 9.3% of residential unit sales was subject to the RETT in 2023.
• Since 2012, the residential component of estimated pro-forma RETT Receipts alone provided more than 1.0x MADS coverage. MADS coverage from actual RETT Receipts (residential and non-residential) over the 2020-2024 period averaged 2.3x.

Credit Challenges

• The short track record of actual RETT Receipts necessitates reliance on pro-forma estimates of historical performance.
• New York City residential real estate sales values and unit transactions, as estimated, have proven particularly sensitive to real estate market cyclicality, as well as to severe economic dislocations including the GFC and the COVID-19 pandemic.
• TBTA intends to leverage pledged revenues up to the $150 million MADS cap (approximately $2.0 - $2.3 billion in debt issuance) in 2025.

Rating Sensitivities

For Upgrade:

• Sustained increases in the share of properties, sales volume and number of unit sales subject to the RETT, resulting in a trend of consecutive years of stable to improving MADS coverage.

For Downgrade:

• A decline in RETT Receipts resulting in MADS coverage of 1.15x or below. The 1.15x threshold takes into consideration the lowest estimated pro-forma coverage in a year that was not associated with a severe economic dislocation (1.17x in 2011).

To access ratings and relevant documents, click here.

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: 1007374

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