Fitch Ratings has assigned an 'A+' rating to approximately $555.465 million Dormitory Authority of the State of New York (DASNY) state of New York consolidated service contract refunding revenue bonds, series 2009, consisting of $545.815 million series 2009A and $9.65 million series 2009B (taxable). The bonds are scheduled to sell the week of Sept. 14, 2009 through negotiation. The Rating Outlook is Stable.
The 'A+' rating is based on the credit quality of the State of New York (general obligations [GO] rated 'AA-', Outlook Stable by Fitch), as bonds are secured by annual legislative appropriations from the general fund, pursuant to a service contract. Appropriation risk is minimal given the central role this type of debt plays in the state's overall debt structure and the state's long history of making payments on such obligations. DASNY has pledged the appropriations to the trustee. Legal provisions include an absolute and unconditional payment provision upon annual appropriation. Pursuant to the state's consolidated refunding legislation, the bonds are being issued to refund certain outstanding state appropriation debt issued by the authority and the New York State Housing Finance Agency.
The state's 'AA-' GO rating reflects its substantial wealth and resources and broad economy while recognizing concerns, now heightened, regarding the outsized role that the financial services industry plays in the state's economy and revenue system. State net tax-supported debt levels have been relatively stable as a percentage of personal income and are expected to remain above average but still in the moderate range; pensions are well funded.
For more information on the State of New York, see Fitch Research 'Fitch Affirms New York State GOs at 'AA-'; Outlook Stable' dated Aug. 4, 2009, and available on the Fitch Ratings web site at 'www.fitchratings.com'.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 'www.fitchratings.com'. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
Contacts:
Fitch Ratings
Laura Porter, +1-212-908-0575 (New York)
Doug
Offerman, +1-212-908-0889 (New York)
Richard Raphael,
+1-212-908-0506 (New York)
or
Media Relations:
Cindy
Stoller, +1-212-908-0526 (New York)
cindy.stoller@fitchratings.com
