New York, November 27, 2012 --

Moody's Ratings

Issue: Transportation System Bonds, 2012 Series A; Rating: A1; Sale Amount: $326,255,000; Expected Sale Date: 12/04/2012; Rating Description: Lease Rental: Appropriation

Issue: Transportation Program Bonds, 2012 Series AA; Rating: A1; Sale Amount: $920,740,000; Expected Sale Date: 12/04/2012; Rating Description: Lease Rental: Appropriation

Opinion

Moody's Investors Service has assigned A1 ratings to the New Jersey Transportation Trust Fund Authority's planned issuance of bonds in two issues as presented above. Proceeds will fund fiscal 2013 transportation projects. The Transportation Program Bonds mark the first borrowing under the authority's 2012 Transportation Program Bond Resolution, and the current offering of Transportation System bonds are the last new-money transaction under the authority's 1995 resolution. The outlook is stable.

SUMMARY RATING RATIONALE

The bonds are special obligations of the Transportation Trust Fund Authority (TTFA), payable from anticipated State of New Jersey contract payments. The A1 rating reflects the need for annual legislative appropriation of the contract payments from the state's general fund, and is notched down from the state's Aa3 general obligation bond rating. Contract payments to TTFA are also supported by specific state revenues dedicated by statute and constitution to the state's transportation needs. There are no remedies in the event of non-appropriation, but debt service on about 90% of New Jersey's net tax-supported debt is subject to appropriation. The essentiality of the authority's transportation financing program, the dedication of revenues to transportation needs and the importance of maintaining capital market access all create a strong incentive for annual debt service appropriations. New Jersey's Aa3 general obligation rating reflects a weakened financial position, rapidly rising fixed costs, a relatively slow economic recovery and lack of a plan to rebuild liquidity and fund balances. In addition, pension and other post-employment benefit (OPEB) liabilities continue to escalate, pressuring the already high-debt state. The Aa3 rating further incorporates New Jersey's diverse economy and high wealth levels, as well as the governor's broad powers to reduce expenditures.

STRENGTHS

-- High resident wealth levels and diversified economy

-- Recent revenue growth suggesting improved economic stability

-- Proactive approach to managing future liabilities and cost growth

-- Broad executive powers to reduce expenditures

-- High reliance on appropriation-backed debt, and history of timely debt-service appropriation

CHALLENGES

-- Revenue growth that is unlikely to keep pace with rapidly increasing fixed-cost expenditures, as state's economic recovery lags the nation's

-- Continued structural budget imbalance

-- Narrowed reserves and weakened liquidity, with no specified plan to rebuild balances

-- Use of debt to fund operations (prior to 2005) and chronic pension underfunding, which have preserved positive GAAP-basis fund balances

-- Budgetary pressure from rapidly growing pension and OPEB costs, adding to already-high debt service costs

-- Fourth-highest debt per capita and above-average pension and retiree health benefit liabilities

-- Absence of certain best governance practices

OUTLOOK

The outlook on New Jersey's general obligation and appropriation-backed credits is stable, based on economic stabilization that to date has allowed for only modest financial improvements, as well as proactive measures to curb long-term liability growth, including pension and OPEB reforms increasing the TTFA's pay-go capital funding to contain long-term borrowing needs.

WHAT COULD MAKE THE RATING GO UP

-- Higher-than-projected, sustained revenue growth that materially eases the budgetary pressure of growing fixed costs

-- Sustained progress in structurally balancing the state's budget, together with restoration and maintenance of financial reserves and liquidity

-- Reduced debt burden, combined with steps to address pension and retiree health benefit funding

-- Adoption and implementation of management practices generally used by the best-rated credits, such as multi-year financial plans and debt affordability analysis

WHAT COULD MAKE THE RATING GO DOWN

-- Slower-than-projected revenue growth that increases budgetary pressure

-- Failure to restore operating reserves or GAAP fund balances and liquidity position

-- Significant increase in state's debt position

-- Growing dependence on nonrecurring budget solutions, particularly in light of rapidly growing pension and OPEB costs

-- Economic recovery that materially lags the nation's

RATING METHODOLOGY

The principal methodology used in this rating was The Fundamentals of Credit Analysis for Lease-Backed Municipal Obligations published in December 2011. Please see the Credit Policy page on www.moodys.com for a copy of this methodology.

REGULATORY DISCLOSURES

The Global Scale Credit Ratings on this press release that are issued by one of Moody's affiliates outside the EU are endorsed by Moody's Investors Service Ltd., One Canada Square, Canary Wharf, London E 14 5FA, UK, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that has issued a particular Credit Rating is available on www.moodys.com.

For ratings issued on a program, series or category/class of debt, this announcement provides relevant regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series or category/class of debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides relevant regulatory disclosures in relation to the rating action on the support provider and in relation to each particular rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides relevant regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.

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Edward Hampton Vice President - Senior Analyst Public Finance Group Moody'sInvestors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653Emily Raimes VP - Senior Credit Officer Public Finance Group JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653 Releasing Office: Moody's Investors Service, Inc.250 Greenwich StreetNew York, NY 10007 U.S.A. JOURNALISTS: 212-553-0376 SUBSCRIBERS: 212-553-1653(C) 2012 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

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