Bangkok--19 Feb--Standard & Poor's
NEW YORK (Standard & Poor's) Feb. 18, 2016--Standard & Poor's Ratings Serviceshas assigned its 'AA' long-term rating and stable outlook to New York City'sfiscal 2016 series C and D general obligation (GO) bonds. We understandofficials plan to use proceeds to refund various series of GO debt for debtservice savings.
At the same time, Standard & Poor's affirmed its 'AA' long-term rating on NewYork City's GO debt outstanding and its 'AA-' rating on the city's leaserevenue bonds. New York City's faith, credit, and unlimited ad valorem pledgesecure the GO bonds, while the lease revenue bonds are subject to annualappropriation. Bondholders also benefit from the security of the general debtservice fund, with city real estate tax revenue deposited into the fund andretained under a statutory formula in an amount sufficient to cover debtservice.
Standard & Poor's also affirmed its 'AA-' rating on the Dormitory Authority ofthe State of New York (DASNY)'s lease revenue bonds outstanding based on thecity's appropriation pledge. A state aid intercept mechanism further securesthe DASNY bonds. Finally, Standard & Poor's affirmed its 'A+' rating on the NewYork City Health & Hospitals Corp.'s (HHC) health system bonds based on the
city's moral obligation pledge, though the bonds are additionally secured by apledge of health care reimbursement revenues. We believe the HHC is essentialto the city's health care infrastructure, in particular, its Medicaidpopulation and its medically underserved areas and, as such, rate the bonds
two notches below the GO debt rating rather than the customary three notches.
Finally, Standard & Poor's also affirmed its 'AAA/A-1+', 'AAA/A-1', 'AA/A-1',and 'AA/A-2' dual ratings on various issuances where the short-term ratingsare based on the liquidity support provided by various financial institutions.
"The stable outlook reflects what we view as New York City's deep and diverseeconomy and status as the nation's largest employment center," said Standard &Poor's credit analyst Hilary Sutton. "Strong and tested financial managementpolicies and practices further support the rating."