KBRA Assigns AAA Rating to State of Ohio General Obligation Highway Capital Improvements Bonds, Series Z, and General Obligation Highway Capital Improvements Refunding Bonds, Series AA; Affirms Rating for Parity Bonds

NEW YORK–(BUSINESS WIRE)–#creditratingagency–KBRA assigns a long-term rating of AAA to the State of Ohio General Obligation Highway Capital Improvements Bonds, Series Z, and General Obligation Highway Capital Improvements Refunding Bonds, Series AA. Concurrently KBRA affirms the AAA rating for the State’s outstanding General Obligation Highway Capital Improvements Bonds. The Outlook is Stable.

Highway Capital Improvements Bonds (HCIBs) are general obligations of the State payable and secured by a pledge of the full faith and credit, revenue and taxing power (excluding net State lottery proceeds) of the State, and fees, excises and license taxes levied by the State relating to registration, operation or use of vehicles on public highways, or to fuels used for propelling such vehicles. The Ohio constitution provides that highway user fees, and HCIBs backed by such user fees, be used solely for highway and road purposes. Furthermore, the constitution limits the amount of HCIBs outstanding to no more than $1.2 billion at any given time (approximately $606.4 million outstanding as of December 2025).

Proceeds of the Series Z Bonds will be used to finance highway capital improvements and the cost of issuance. Proceeds of the Series AA Bonds will refinance certain outstanding Bonds and pay costs of issuance.

Key Credit Considerations

The rating affirmation reflects the following key credit considerations:

Credit Positives

• Double-barreled nature of the security, consisting of a pledge of both constitutionally dedicated highway taxes and the State’s general obligation, effectively placing HCIBs in a priority position relative to G.O. bondholders.
• Exceptionally strong coverage (27.3x, FY 2025) of HCIB debt service from constitutionally dedicated pledged revenues.
• Minimal risk of overleveraging pledged revenue source given HCIB debt cap (maximum $1.2 billion).
• Socioeconomic indicators including population, employment and gross state product growth lag the U.S.

Credit Challenges

Rating Sensitivities

For Upgrade:

• Not applicable at AAA rating level.

For Downgrade:

• Significant deterioration in pledged revenues or the State’s general credit fundamentals.

To access ratings and relevant documents, click here.

Methodologies

• Public Finance: U.S. Special Tax Revenue Bond Rating Methodology
• Public Finance: U.S. State General 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.

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: 1012905

Contacts

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Douglas Kilcommons, Managing Director (Rating Committee Chair)

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