On July 30, 2019, S&P Global Ratings published a request for comment (RFC) on proposed updates to its methodology "U.S. And Canadian Not-For-Profit Transportation Infrastructure Enterprises: Methodologies And Assumptions," published March 12, 2018. The proposed updates, in "Request For Comment: Global Not-For-Profit Transportation Infrastructure Enterprises: Methodologies And Assumptions," would expand the scope of these criteria to issuers globally and add mass transit systems in our definition of transportation infrastructure enterprises (TIEs). This article answers frequently asked questions related to the proposed criteria updates.
Frequently Asked Questions
What mass transit entities are in-scope of the proposed criteria updates?
See the list in table 1.
Table 1
Ratings Of In-Scope Mass Transit Credits As Of Aug. 27, 2019 | ||||||||||
---|---|---|---|---|---|---|---|---|---|---|
State | Country | Senior-lien issue rating | Outlook | |||||||
British Columbia Ferry Services Inc. | N/A | Canada | AA- (1) | Positive | ||||||
Societe de Transport de Montreal (STM) | N/A | Canada | AA- (1) | Stable | ||||||
Rheinbahn AG | N/A | Germany | AA/A-1+ (1) | Stable | ||||||
Transport for London (TfL) | N/A | Great Britain | AA-/A-1+ (1) | Negative | ||||||
Consorcio de Transportes de Bizkaia (CTB) | N/A | Spain | A+/A-1 (1) | Positive | ||||||
Alameda Contra Costa Transit District | CA | U.S. | A+ | Stable | ||||||
Bi-State Development Agency | MO | U.S. | AA+ (2) | Stable | ||||||
Capital Metropolitan Transportation Authority | TX | U.S. | AA- (1) | Stable | ||||||
Central Puget Sound Regional Transit Authority | WA | U.S. | AAA (2) | Stable | ||||||
Chicago Transit Authority | IL | U.S. | A+ | Stable | ||||||
Chicago Transit Authority | IL | U.S. | AA (2) | Stable | ||||||
Corpus Christi Regional Transportation Authority | TX | U.S. | A+ | Stable | ||||||
Dallas Area Rapid Transit | TX | U.S. | AA+ (2) | Stable | ||||||
Greater Cleveland Regional Transit Authority | OH | U.S. | AA+ (2) | Stable | ||||||
Harris County Metropolitan Transit Authority | TX | U.S. | AAA (2) | Stable | ||||||
Indianapolis Public Transportation Corp. | IN | U.S. | AA- (2) | Stable | ||||||
Jefferson Transit Authority | WA | U.S. | AA (2) | Stable | ||||||
Los Angeles County Metropolitan Transportation Authority | CA | U.S. | AAA (2) | Stable | ||||||
Metropolitan Atlanta Rapid Transit Authority | GA | U.S. | AA+ (2) | Stable | ||||||
Metropolitan Transportation Authority of New York | NY | U.S. | A | Negative | ||||||
Napa Valley Transportation Authority | CA | U.S. | A- (1) | Stable | ||||||
New Orleans Regional Transit Authority | LA | U.S. | A (2) | Stable | ||||||
Peninsula Corridor Joint Powers Board | CA | U.S. | A+ | Stable | ||||||
Regional Public Transportation Authority (Valley Metro) | AZ | U.S. | AA+ (2) | Stable | ||||||
Regional Transportation District | CO | U.S. | AA- | Stable | ||||||
Regional Transportation District | CO | U.S. | AAA (2) | Stable | ||||||
Roaring Fork Transportation Authority | CO | U.S. | AA (2) | Stable | ||||||
Sacramento Regional Transit District | CA | U.S. | A- | Stable | ||||||
San Diego Metropolitan Transit System | CA | U.S. | AA- | Stable | ||||||
San Francisco Bay Area Rapid Transit | CA | U.S. | AA+ (2) | Stable | ||||||
San Francisco Municipal Transportation Agency | CA | U.S. | AA | Stable | ||||||
San Mateo County Transit District | CA | U.S. | AAA (2) | Stable | ||||||
Santa Clara Valley Transportation Authority | CA | U.S. | AA+/A-1+ (2) | Stable | ||||||
Snohomish County Public Transportation Benefit Area Corp. | WA | U.S. | AAA (3) | Stable | ||||||
Sonoma Marin Area Rail Transit District | CA | U.S. | AA (2) | Stable | ||||||
St. Cloud Metro Transit Commission | MN | U.S. | AA- | Stable | ||||||
Tri-County Metropolitan Transportation District | OR | U.S. | AAA (2) | Stable | ||||||
Utah Transit Authority | UT | U.S. | AA (2) | Stable | ||||||
VIA Metropolitan Transit Authority | TX | U.S. | A+ | Stable | ||||||
VIA Metropolitan Transit Authority | TX | U.S. | AA (2) | Stable | ||||||
Washington Metropolitan Area Transit Authority | DC | U.S. | AA- | Stable | ||||||
(1) Long-term rating refers to the entity issuer credit rating. (2) Rating is based on our priority-lien criteria. (3) Rating not yet reviewed under our priority-lien criteria. |
How does S&P Global Ratings factor in transit operations when rating issuers of sales tax bonds?
Under our rating methodology "Priority-Lien Tax Revenue Debt", published Oct. 22, 2018, we evaluate the priority-lien revenue stream (expressed as a stand-alone credit profile). In addition, we analyze the effect, if any, of caps and overrides based on the related obligor's creditworthiness. To determine obligor creditworthiness, we apply "Mass Transit Enterprise Ratings: Methodology And Assumptions", published Dec. 18, 2013. Under the RFC, this would change and instead we would assess obligor creditworthiness using our proposed criteria "Global Not-For-Profit Transportation Infrastructure Enterprises: Methodologies And Assumptions."
What impact would the proposed criteria have on in-scope mass transit issuers of sales tax bonds rated under S&P Global Ratings' priority-lien criteria?
Testing suggests that approximately two-thirds of mass transit ratings would be unchanged.
Does S&P Global Ratings plan to update the Credit FAQ "Criteria Considerations For Mass Transit Agency Ratings," published Nov. 14, 2018?
This Credit FAQ outlines how we currently evaluate mass transit entities that have debt secured by special taxes applying our priority-lien and mass transit criteria. If the RFC becomes final criteria, our mass transit criteria will be superseded and the exception outlined in this Credit FAQ will no longer be applicable. As noted above, ratings derived using our priority-lien criteria will still have a linkage to the creditworthiness of mass transit entities using the Global TIE criteria.
This report does not constitute a rating action.
Analytical Contact: | Joseph J Pezzimenti, New York (1) 212-438-2038; joseph.pezzimenti@spglobal.com |
Paul J Dyson, San Francisco (1) 415-371-5079; paul.dyson@spglobal.com | |
Kurt E Forsgren, Boston (1) 617-530-8308; kurt.forsgren@spglobal.com | |
Todd R Spence, Farmers Branch (1) 214-871-1424; todd.spence@spglobal.com | |
Jane H Ridley, Centennial (1) 303-721-4487; jane.ridley@spglobal.com | |
Bhavini Patel, CFA, Toronto (1) 416-507-2558; bhavini.patel@spglobal.com |
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