KBRA assigns a long-term rating of AA+ to the San Francisco Bay Area Rapid Transit District, CA's ("the District") outstanding Senior Lien Sales Tax Revenue Bonds. In addition, KBRA assigns a long-term rating of AA to the District's Junior Lien Sales Tax Revenue Bonds, Series 2024-A and Series 2024-B TIFIA loans. The rating Outlook is Stable.

The ratings reflect the District's gross revenue pledge with collections by the California Department of Tax and Fee Administration (CDTFA), a broad sales tax revenue base, continued favorable sale tax revenue trend, and strong historic and proforma debt service coverage (DSC), both for the senior and junior lien obligations. The ratings also recognize the underlying strength of the metropolitan San Francisco economy, which benefits from high wealth levels and a diverse commercial/industrial base.

Key Credit Considerations

The ratings were assigned because of the following key credit considerations:

Credit Positives

• Pledged Sales Tax Revenues provide ample pro forma coverage of maximum annual debt service (MADS) requirements for the sales tax revenue bonds and the junior lien TIFIA loans.
• Sales tax generated by sizable, diverse, and resilient economic base.
• Gross revenue pledge with sales taxes collected by CDTFA and directly deposited with Trustee.

Credit Challenges

• Bonds are solely secured by sales taxes, which may at times be adversely affected by economic factors.
• Although unlikely, possible legislative or electorate changes to the transactions and items subject to the State’s general sales tax.

Rating Sensitivities

For Upgrade

• Sustained favorable sales tax revenue trend and absence of prior obligation borrowing that narrows debt service coverage levels.

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 rating 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: 1006287

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