KBRA assigns a long-term rating of AAA with a Stable Outlook to the New Mexico Finance Authority State Transportation Revenue Bonds (State Transportation Commission - Subordinate Lien), Series 2026A. Concurrently, KBRA affirms the long-term rating of AAA with a Stable Outlook on the outstanding New Mexico Finance Authority State Transportation Revenue Bonds (State Transportation Commission - Senior Lien and Subordinate Lien).

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

• Robust coverage of combined MADS from a diverse and stable array of Pledged Revenues.
• Rapid debt amortization of the Bonds, with the final maturity of 2041.
• Stringent additional bonds provisions that protect the TRB credit from overleveraging.

Credit Challenges

• Periodic reauthorization risk associated with FAHP, mitigated by the stability and diversity of the State Revenues component of Pledged Revenues.
• Economic dependency of the State on the energy sector which can be volatile, coupled with below national average State wealth income metrics.

Rating Sensitivities

For Upgrade

• N/A

For Downgrade

• While not expected, a pronounced decline in debt service coverage stemming from a severe, sustained decline in Pledged Revenues or overleveraging of the TRB credit.

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Methodology

• Public Finance: U.S. Special Tax Revenue Bond 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), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1015232

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