S&P Raises N.Y.C. GOs To AA-Minus - 23 May, 2006
Standard & Poor's yesterday upgraded New York City's general obligation debt to AA-minus from A-plus ahead of today's sale of $600 million in bonds. The upgrade affects about $34.2 billion of GO debt. The outlook is stable.
In a statement, the rating agency said New York City's May 2006 updated financial plan shows continued strength in the economy, with fiscal 2006 revenue expected to come in ahead of original forecasts. The city projects $54.6 billion in revenue, an increase of $4.5 billion, or 8.9%, over the original estimate of $54.1 billion in July 2005.
Revenues are surging well above forecast, enabling the city to continue prepaying expenses and begin to address long-term liabilities such as retiree health care benefits, Standard & Poor's analyst Robin Prunty said.
This is the agency's second upgrade of the city's GO rating in just over a year. Last May, Standard & Poor's upgraded the city to A-plus from A. That followed Moody's Investors Service decision the previous month to upgrade the city's GO debt to A1 from A2. Fitch Ratings rates the debt A-plus.
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