KBRA assigns a long-term rating of AAA with a Stable Outlook to the following Commonwealth of Massachusetts bonds:

• Commonwealth Transportation Fund Revenue Bonds (Rail Enhancement Program) 2025 Series A
• Commonwealth Transportation Fund Revenue Refunding Bonds 2025 Series A

Concurrently, KBRA affirms the long-term rating of AAA with a Stable Outlook for the Commonwealth's outstanding Commonwealth Transportation Fund (CTF) Revenue Bonds.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

• Very broad and resilient nature of CTF pledged revenues which, to date, have generated more than 4.0x coverage of maximum annual debt service.
• Extensive legal protections that collectively and effectively insulate pledged revenues from Commonwealth budget operations.
• The Commonwealth’s diverse, wealthy, and growing economy.

Credit Challenges

• The motor fuels portion of pledged revenues (~53.3% of FY 2025 pledged revenues) is economically sensitive and vulnerable to declines during recessionary periods.
• Longer term, structural shifts in fuel consumption patterns driven by the continued phase-in of electric, hybrid, and increasingly efficiency conventional vehicles may pressure the motor fuels portion of pledged revenues.

The Stable Outlook reflects KBRA’s expectation that pledged revenues will remain resilient and are unlikely to decline significantly enough to impair coverage of debt service, even under very adverse economic conditions. Further, KBRA believes the Commonwealth has no meaningful incentive to divert or dilute the pledged revenues in ways that would be detrimental to bondholders.

Rating Sensitivities

For Upgrade

• Not applicable at AAA rating level

For Downgrade

• An unlikely scenario where there was a substantial and sustained decline in pledged revenues.

To access ratings and relevant documents, click here.

Methodologies

• Public Finance: U.S. Special Tax Revenue Bond Rating Methodology
• ESG Global 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: 1011333

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