KBRA assigns a long-term rating of AA+ to the San Francisco Bay Area Rapid Transit District's (the "District") Sales Tax Revenue Bonds 2025 Refunding Series A. Additionally, KBRA affirms the long-term rating of AA+ and AA for the District's outstanding Senior Lien Sales Tax Revenue Bonds and Junior Lien Sales Tax Obligations (TIFIA loan), respectively. The rating Outlook is Stable.

Key Credit Considerations

The rating was assigned and affirmed because of the following key considerations:

Credit Positives

• Pledged sales tax revenues provide ample proforma coverage of maximum annual debt service (MADS) requirements for the senior lien sales tax revenue bonds and the junior lien TIFIA Loan.
• Sales taxes are generated within a sizable, diverse, and resilient economic base.
• Gross revenue pledge with sales taxes collected by the California Department of Tax and Fee Administration and is directly deposited with Trustee.

Credit Challenges

• Bonds are solely secured by sales taxes, which may at times be adversely affected by economic factors.
• While not anticipated, there is the potential for legislative changes to the transactions and items subject to the State’s general sales tax which could negatively affect pledged sales tax revenues.

Rating Sensitivities

For Upgrade

• Sustained and material improvement in the sales tax revenue trend which boosts debt service coverage.

For Downgrade

• Significant secular economic downturn or material outmigration that results in sharp reductions in pledged sales tax revenues and debt service coverage.

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), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1010784

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