KBRA assigns a long-term rating of A with a Stable Outlook to the New Jersey Transportation Trust Fund Authority (NJTTFA) Transportation Program Bonds, 2023 Series BB.

KBRA additionally affirms the long-term rating of A+ with a Stable Outlook for the State of New Jersey's General Obligation Bonds.

Lastly, KBRA affirms the long-term rating of A with a Stable Outlook for the following bonds:

New Jersey Transportation Trust Fund Authority

■ Transportation Program Bonds

■ Transportation Program Notes (Fixed Rate)

New Jersey Economic Development Authority (NJEDA)

■ Lease Revenue Bonds

New Jersey Education Facilities Authority (NJEFA)

■ Revenue Bonds, Higher Education Capital Improvement Fund Issues

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

■ State economic base is large and diverse. Per capita personal income is the fourth highest in the nation. ■ Governor has broad executive powers under the New Jersey Constitution to adjust the budget and reduce spending to maintain budget balance.

Credit Challenges

■ The ability to achieve balanced operations and satisfactory reserves will be challenged by the loss of one-time federal revenues available to bolster finances through the pandemic.

■ Unfunded pension and OPEB liabilities are very high relative to personal income and gross state product. ■ Expiration of a 2.5% surcharge on corporate business tax at the end of CY 2023 is expected to reduce revenues by $333 million in FY 2024 and nearly a billion each year thereafter when fully phased out and could challenge structural budgetary balance.

Rating Sensitivities

For Upgrade

■ Track record of consistently balanced operations that do not rely upon non-recurring revenues, provide full actuarially determined pension contributions, and support maintenance of substantial operating reserves.

■ Economic growth patterns that meet or exceed regional and national trends.

For Downgrade

■ A resumption of the pattern of underfunding full actuarial pension contributions.

■ A significant diminution of reserves to balance financial operations to a level no longer consistent with the rating level.

■ Deteriorating economic conditions.

To access rating and relevant documents, click here.

Methodologies

Public Finance: U.S. State General Obligation Rating Methodology

Public Finance: U.S. State Annual Appropriation Obligation 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.

Only those ratings on securities issued by this Issuer that also are denoted on the Security Ratings tab for this Issuer on KBRA.com as “endorsed” by Kroll Bond Rating Agency Europe Limited into the European Union and/or by Kroll Bond Rating Agency UK Limited into the UK are covered by the disclosures set forth in this press release and the corresponding Information Disclosure Form. No other ratings on issuances by this Issuer have been endorsed into the European Union or the UK, and the disclosures set forth herein and in the corresponding Information Disclosure Form are inapplicable to those ratings and may not be used for regulatory purposes by European Union or UK investors in these securities.

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) is a full-service credit rating agency 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 by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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