New York’s Metropolitan Transportation Authority began marketing its first-ever bond sale backed by a payroll tax, with debt maturing in 30 years initially offering a 1.9% yield, according to preliminary pricing information.

The MTA, the operator of the nation’s largest public-transit system, is issuing the debt backed by that tax to provide extra security to investors after subway and bus ridership plunged after the pandemic. That preliminary yield is 34 basis points over the AAA benchmark.

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The $1.2 billion offering includes $995.8 million of tax-exempt bonds and $248 million of taxable debt, according to preliminary pricing.

Because the payroll tax is a more stable source of revenue, the new bonds carry AA+ credit ratings from S&P Global Ratings and Fitch Ratings. That’s six steps higher than S&P’s BBB+ grade and five levels above Fitch’s A- rating on MTA’s transportation revenue bonds, which are backed by fares and tolls.