KBRA has assigned a long-term rating of AAA to the New Mexico Finance Authority State Transportation Revenue Refunding Bonds (State Transportation Commission - Senior Lien), Series 2024. Concurrently, KBRA affirms the long-term rating of AAA on both outstanding parity Senior Lien State Transportation Revenue Bonds, and outstanding Subordinate Lien State Transportation Revenue Bonds. The Outlook on all bonds is Stable.

Key Credit Considerations

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

Credit Positives

• Robust pro-forma coverage of maximum annual debt service from a diverse and stable array of Pledged Revenues.
• All Senior Lien and Subordinate Lien bonds are to be fully amortized by 2031.
• The Indenture’s strict Additional Bonds Test protects against overleveraging. Furthermore, other than refunding issuance, no additional Senior Lien or Subordinate Lien debt issuance is authorized under the Act.

Credit Challenges

• The bonds are subject to the periodic risk of non-reauthorization of FAHP funding. This risk is mitigated, however, by the stability and diversity of the State Revenues component of Pledged Revenues, and by the federal transportation contract authority distributed to state departments of transportation through formula programs.
• The state’s economic dependence upon the energy sector may present resource base vulnerabilities over the long term.
• State wealth and income metrics are below the national average.

Rating Sensitivities

For Upgrade

• Not Applicable

For Downgrade

• Pronounced decline in the collection of Pledged Revenues and resultant coverage levels.

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: 1004455

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