Moody's announces completion of a periodic review for a group of Mass Transit issuers

New York, January 13, 2023 -- Moody's Investors Service ("Moody's") has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.

Key Rating Considerations

The principal methodology used for the rated entities listed below was Mass Transit Enterprises Methodology published in December 2017. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Mass Transit Enterprises Methodology

Size and Market Profile: Metrics may include but are not limited to scope of operations as measured by operating revenue or usage volume (such as annual ridership or traffic volume) and service area population, network, project or facility size, physical limitations on types of services which can be provided and ease of expansion; strategic positioning exhibited by pricing power, competitive profile including proximity to competing facilities and sustainability of such competitiveness, monopoly position; essentiality of an asset to users, ability to generate demand based on strength and size of service area; capital investment funding and flexibility, diversity as measured by ratio of single largest revenue source to operating revenue; charter renewal risk, ownership and affiliation; service area wealth, economic diversity, income, size and growth rate as measured by data provided by the US Bureau of the Census, Bureau of Labor Statistics and commercial data vendors (where applicable).

Operating Performance and Risk: Metrics may include but are not limited to annual revenue, 3 year average operating margin, 5 year compound growth rate of operating revenue, stability and predictability of revenues, diversity of revenue from various payors/contributors/ operations; size and trend of operating cash flow margin or EBITDA; service area trend and utilization data, fixed costs as a portion of operating expenditures; measures of historic and expected usage measured by standard deviations of year over year; length of time in operation of asset; historic demand and revenue trends, demonstrated ability and willingness to raise rates and/or economic regulation; complexity of relevant technology; availability of cash flow to fund capital needs, operating performance relative to industry norms; quality of operator & experience with the asset type; strength and commitment of sponsor & likelihood of operational and financial support; protections in the concession and regulatory framework; restrictions on business activities, use of debt and revenue distributions.

Financial Position, Policy and Ownership: Metrics may include but are not limited to amount of cash & investments; days cash on hand; ratio of total cash and investments to operating expenses; debt service coverage; level of self-support; budget flexibility, operating cash flow margin, liquidity to demand debt, liquidity reserves or contractual arrangements. Assessments may include but are not limited to an Issuer's desired capital structure / credit profile, and its adherence to its commitments and our views on the ability of the company to achieve its targets, an assessment of the likelihood and potential negative impact of M&A or other types of balance-sheet-transforming events, and the likelihood of uncontracted financial support being provided by owners; and the protective terms of debt documentation including but limited to restrictions on business activities, use of debt and revenue distributions; and control and liquidity afforded to creditors.

Debt Affordability: Metrics may include but are not limited to size and scope of multi-year CIP (capital improvement plan) relative to condition of assets that will rely on debt for funding; ratio of total cash and investments to debt and/or interest payments; ratio of debt to operating revenue; debt service coverage and ratios; ratio of debt to cash flow and to operation revenue; interest coverage metrics and concession life coverage ratios; debt and debt equivalents.

-     Alameda-Contra Costa Transit Dist, CA

The principal methodology used for the rated entities listed below was US Public Finance Special Tax Methodology published in January 2021. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

US Public Finance Special Tax Methodology

Revenue Base Characteristics: Metrics may include, but are not limited to, per capital income relative to US average; GDP growth relative to US average; full value; median family and household income relative to US average; size of operating and maintenance budget; nature of pledged revenue supporting repayment; enrollment trends.

Market Position: Metrics may include but are not limited to revenue predictability and stability; service area or system size; asset condition; utilization; legal and practical ability to match revenues with spending and other governance considerations.

Financial Position: Metrics may include but are not limited to debt service coverage; absolute and relative fund balance and cash position; budget flexibility; revenue trends; relationship between inflows and outflows.

Debt Affordability: Metrics may include but are not limited to leverage as defined by spendable cash and investments to debt; leverage compared to revenues; leverage compared to full value; ability to issue additional debt on the same revenue base; any debt service reserve funds and requirement; fixed costs compared to own source revenue.

-     Bi-State Development Agency, MO

The principal methodology used for the rated entities listed below was Lease, Appropriation, Moral Obligation and Comparable Debt of US Special Purpose Districts Methodology published in November 2022. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Lease, Appropriation, Moral Obligation and Comparable Debt of US Special Purpose Districts Methodology.

Quality of Asset: Metrics may include but are not limited to long term general obligation rating- or equivalent- of the issuer, credit quality of counterparties.

Program /Asset Essentiality: Metrics may include but are not limited to the importance of the project to the core operations of the government.

Legal Structure and Program Mechanics: Metrics may include but are not limited to strength of clarity and timing of the administrative process to make the annual debt service appropriation decisions, reliability and timeliness of state aid payments; debt service coverage levels and priority of payments.

-     2 Broadway LLC

The principal methodology used for the rated entities listed below was Short-term Debt of US States, Municipalities and Nonprofits Methodology published in July 2020. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.

Short-term Debt of US States, Municipalities and Nonprofits Methodology

Quality of Issuer: Metrics may include but are not limited to the long-term rating of the Issuer/Obligor/US Government.

Structure and Notification Procedures: Metrics may include but are not limited to clarity in the relevant legal documents documenting roles and responsibilities of all parties to the transaction.

Strength of Debt and Treasury Functions: Metrics may include but are not limited to size and experience of dedicated staff; documentation of policies and procedures; history of compliance with internal policies and procedures; historic access to capital markets; history of size of working capital funds and related investment portfolio management.

Liquidity Sufficiency and Composition: Metrics may include but are not limited to coverage ratio of liquid assets to demand debt or maturing commercial paper; diversification of sources of liquidity; availability of back-up bank facilities.

Project Risk: Metrics may include but are not limited to length of the construction period for the project; cushion between expected project completion and note maturity; complexity of construction of the project; need for additional funding sources for project completion.

Borrower Risk: Metrics may include but are not limited to quality of operating performance; adequacy of liquidity for operating needs and potential project overruns; history of project completion for other projects; essentiality of the project for the public good; size of the project compared to the tax base.

-     Dallas Area Rapid Transit, TX

Variable Rate Instruments Supported by Conditional Liquidity Facilities

Quality of Support Provider/Asset: Metrics may include but are not limited to ratings on the provider of mortgage enhancement, liquidity facilities, letters of credit, deposited assets, counterparties and program participants.

Sufficiency of Support: Provisions may include but are not limited to cash flow sufficiency to pay scheduled debt service; size of credit or liquidity facilities; provisions for timely payment of debt service.

Legal Structure: Provisions may include but are not limited to mitigation of bankruptcy risk, enforceability of the credit/liquidity facility, events which result in termination of the support facility, pledged security, exemption from registration under the securities acts.

-     Dallas Area Rapid Transit, TX

This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.

Please see the Issuer page on https://ratings.moodys.com for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.

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