“If there is no action taken by the state [of New York] to close the [budget] gap, or if action is taken but is largely-one-time in nature (therefore increasing the structural imbalance in the outyears), and revenue collections in January are close to or below state projections, the state’s situation at that time would likely not be consistent with a Aa3 rating and stable outlook.”

So says Moody’s Investors Service in assigning an Aa3 and a “stable” outlook rating—perhaps for the last time in a while—to $351 million in New York general obligation refundng bonds.

On the Moody’s scale, a Aa rating denotes an issuer demonstrating “very strong creditworthiness relative to other US municipal or tax-exempt issuers or issues,” while “the modifier 3 indicates a ranking in the lower end of that generic rating category.”  Next step down on the Moody’s scale is A1.  California is the lowest-rated state, at Baa.

About the Author

E.J. McMahon

Edmund J. McMahon is Empire Center's founder and a senior fellow.

Read more by E.J. McMahon

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