Moody's Investors Service said it has downgraded the rating on the Massachusetts Bay Transportation Authority's senior sales tax bonds to Aa2 from Aa1 and assigned a stable outlook.

The downward rating revision reflects reduced debt service coverage due to cumulative sales tax underperformance over the past decade; strained financial operations that have led to one-time actions to lower debt service costs for budget relief; a complex variable rate debt and swap portfolio combined with modest liquidity, and heightened risk in the variable rate portfolio related to liquidity facilities with banks that have been downgraded recently.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.