New York City received a badly needed shot in the arm Thursday from the capital markets as it prepares to come out of the COVID-19 pandemic.
Moody’s Investors Service revised its outlook on the city’s general obligation bonds to stable from negative while affirming its Aa2 rating.
The move affects $38.7 billion of general obligation debt, Moody’s said in a statement.
Moody’s cited improvement in the city's overall financial position, including massive federal aid providing “substantial budget flexibility,” and elimination of the risk that New York State will cut aid to the city.
The city’s federal aid, which exceeds $15 billion, equals 24% of its estimated fiscal 2022 revenue.
“The outlook revision also reflects the positive impact on employment and tax revenue that the city's accelerating reopening will have, although we still expect the jobs recovery in New York to continue to lag the nation,” Moody’s said.
Some major employers have announced their intent to return workers to their offices, although with more remote work and less office space. According to Moody’s, the percentage of fully vaccinated residents is slightly better than the national rate and will also help drive confidence in the local economy.
“Future year budget gaps persist and will be manageable but will need to be balanced amid slowly growing property tax revenue, reduced reserves and the need to keep pace with large pension and retireshealthcare liabilities,” Moody’s said.
Mayor Bill de Blasio last month presented a $98.6 billion
Many municipal issuers have experienced revised outlooks since the passage of the American Rescue Plan, which President Biden signed two months ago.
Moody’s also affirmed the Aa3 ratings assigned to roughly $4.5 billion of appropriation-backed debt issued through the Hudson Yards Infrastructure Corp., the city’s Health + Hospitals unit, the New York City Industrial Development Agency (New York Stock Exchange Project), New York City Educational Construction Fund and the Dormitory Authority of the State of New York municipal health and court facilities lease revenue bonds.
In addition, Moody's affirmed its Aa3 enhanced rating on the DASNY municipal health facilities improvement Program bonds.
Fitch Ratings and S&P Global Ratings rate city GOs AA-minus and AA, respectively, both with negative outlooks.
According to data on the Municipal Securities Rulemaking Board's EMMA website, a block of Series 2012-A bonds maturing in 2025 that originally priced at 109.799 cents on the dollar and a 5% coupon, sold to a customer Thursday at a price of 100.938 cents.
“There are so many pieces that go into the recovery we are building every single day in this city,” de Blasio said Thursday.
Daily coronavirus indicators, he said, are “well below threshold.” On Wednesday, he said, the daily number of people admitted to city hospitals for suspected coronavirus totaled 92, Hospitalization rate, he added, “keeps going down,” at 1.19 per 100,000.
