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Rating Action:

Moody's upgrades Tri-County Metropolitan Transportation District of Oregon payroll tax revenue bonds to Aaa; outlook stable

Global Credit Research - 24 Aug 2015

Upgrade affects approximately $185 million outstanding payroll tax revenue bonds

New York, August 24, 2015 --

Moody's Rating

Issue: Senior Lien Payroll Tax Revenue Bonds, Series 2015A; Rating: Aaa; Sale Amount: $70,000,000; Expected Sale Date: 09-09-2015; Rating Description: Special Tax: Transportation - Related

Issue: Senior Lien Payroll Tax Revenue Refunding Bonds, Series 2015B; Rating: Aaa; Sale Amount: $65,700,000; Expected Sale Date: 09-09-2015; Rating Description: Special Tax: Transportation - Related

Opinion

Moody's Investors Service has upgraded to Aaa from Aa1 the Tri-County Metropolitan Transportation District of Oregon's (TriMet) Senior Lien Payroll Tax Revenue Bonds. Concurrently, we have assigned a Aaa rating to its $70 million Series 2015A and $65.7 million Series 2015B bonds, expected to price on September 9.

SUMMARY RATING RATIONALE

The upgrade reflects the robust economic growth in the TriMet service area, along with TriMet's strong management of operations and capital projects, demonstrated by the recent completion of the Portland-Milwaukie Light Rail, the largest capital project for the district at $1.5 billion, on-time and under budget. The Aaa rating also incorporates TriMet's notably strong legal provisions that includes a four times additional bonds test (ABT), the highest in the tax-backed transit sector; trustee intercept of pledged revenues which insulates bondholders from possible operating stress; and weekly set asides of pledged revenues. Other rating considerations include the strength of the gross senior lien pledge of state in-lieu payments and payroll and self-employment taxes collected in the "Tri-County" area of Oregon; and TriMet's future debt plans.

OUTLOOK

The stable outlook reflects our expectation the debt service coverage will remain sound despite future borrowing.

WHAT COULD MAKE THE RATING GO DOWN

-- Lower debt service coverage resulting from economic weakness or aggressive issuance of new debt absent new revenue sources

-- Legislative changes that adversely affect the enacted payroll tax increases

OBLIGOR PROFILE

TriMet provides public transportation services in the City of Portland metropolitan area with a total estimated population of 1.7 million or 40% of the state's total population. TriMet is one of the most heavily utilized systems in the transit sector. The service area encompasses a 533 square mile area within the counties of Multnomah, Washington and Clackamas. Transportation services provided by TriMet include bus service, streetcar, light rail (also known as the Metropolitan Area Express or MAX), and commuter rail or the Westside Express Service (WES). There are approximately 100 million annual boardings, with 315,000 trips taken each weekday.

LEGAL SECURITY

The bonds are secured by a gross pledge of payroll and self-employment tax receipts levied in the Tri-County area. Starting in fiscal 2010, the pledged revenues were expanded to include payments in lieu of taxes made by the state on behalf of its employees in the Tri-County area, which account for 1.1% of revenues.

USE OF PROCEEDS

Proceeds of the 2015A bonds will be used for capital projects, including the partial funding of replacement fixed route buses and an electronic fare system. The 2015B bonds will refund outstanding senior lien payroll tax bonds.

RATING METHODOLOGY

The principal methodology used in this rating was US Public Finance Special Tax Methodology published in January 2014. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

For ratings issued on a program, series or category/class of debt, this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

The following information supplements Disclosure 10 ("Information Relating to Conflicts of Interest as required by Paragraph (a)(1)(ii)(J) of SEC Rule 17g-7") in the regulatory disclosures made at the ratings tab on the issuer/entity page on www.moodys.com for each credit rating:

Moody's was not paid for services other than determining a credit rating in the most recently ended fiscal year by the person that paid Moody's to determine this credit rating.

Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.

Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.

Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating.

John Lombardi
Associate Analyst
Public Finance Group
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Kenneth Kurtz
Senior Vice President
Public Finance Group
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Releasing Office:
Moody's Investors Service, Inc.
250 Greenwich Street
New York, NY 10007
U.S.A.
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's upgrades Tri-County Metropolitan Transportation District of Oregon payroll tax revenue bonds to Aaa; outlook stable
No Related Data.
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