Fitch Affirms $550MM New York City TFA Bonds 'AA+'.Business Editors NEW YORK--(BUSINESS WIRE)--March 28, 2003 In conjunction with the upcoming sale, Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. affirms the program rating on the New York City New York City: see New York, city. New York City City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. Transitional Finance Authority's future tax secured bonds at 'AA+'. The rating applies to $9.419 billion in outstanding parity bonds and $550,000,000 in fiscal 2003 series E to be offered the week of March 31, through a syndicate led by Morgan Stanley  To comply with Wikipedia's , the introduction of this article needs a complete rewrite. . The bonds are due Feb. 1, 2005-2033, Details to be determined. The rating reflects the very high credit quality of the legal structure and revenues securing the New York City Transitional Finance Authority's (TFA TFA Teach For America TFA Thyroid Foundation of America TFA Trifluoroacetic Acid TFA Trans Fatty Acid TFA Two Factor Authentication (computer security authentication) TFA Texas Forensic Association TFA Total Fatty Acids ) bonds. Bond proceeds will be applied to the New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of City's capital program. The ratings incorporate criteria relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc both structured and municipal financings. The TFA was established by New York State legislation as a bankruptcy-remote funding vehicle for the City of New York. The future tax secured bonds are issued by the TFA and secured by future collections of personal income tax (PIT), with additional support from sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. revenues if necessary. Revenues from the PIT flow directly from the state comptroller The power of the Knesset to supervise and review government policies and operations is exercised mainly through the state comptroller (Hebrew: מבקר המדינה to the TFA. The city receives residual revenues only after TFA bondholders have been paid. The bonds are secured by an additional revenue stream (sales tax revenues subordinate to outstanding Municipal Assistance Corporation (MAC) bonds) in the event debt service coverage falls below a statutory minimum. The future tax secured bonds possess a lien on revenues senior to the $2.5 billion authorization of recovery bonds to fund recovery costs associated with the events of Sept. 11, including replacing an estimated $1.5 billion in related revenue loss to the city. About $2 billion of recovery bonds are outstanding (rated 'AA+' by Fitch). The ratings reflect the bankruptcy remote, statutorily defined nature of the issuer, the bond structure involving a first perfected security interest in revenues that are not subject to appropriation, statutory covenants prohibiting action that would impair bondholders and New York State as collection agent. Within this construct, the existence of two separately levied cash flow streams (the statutory revenues) totaling $7.908 billion in fiscal 2002 provide strong coverage of 5.99 times (x) maximum allowable senior debt service. Maximum allowable senior debt service is established on a very conservative basis, including an extremely high 9% interest rate for the $11.5 billion in senior debt allowed under the indenture. Statutory revenues have been notably weakened by the economic downturn and the events of Sept. 11. Revenues are forecast to decline slightly in fiscal 2003 from fiscal 2002 actual collections, mainly related to an increase in MAC funding requirements. Personal income tax is expected to remain flat after a 22% drop in fiscal 2002 or about a 15% decline on a common rate basis, while gross sales Gross Sales A measure of overall sales that isn't adjusted for customer discounts or returns, calculated simply by adding all sales invoices, and not including operating expenses, cost of goods sold, payment of taxes, or any other charge. tax revenues are forecast to grow 3.7% after an 8.2% decline in fiscal 2002. Statutory revenues are forecast to grow moderately beginning in fiscal 2004 but not to reach fiscal 2001 levels again until fiscal 2007. The Mayor has indicated that effectively statutory revenues in fiscal 2004 could decline by $150-$200 below the current estimate. Nevertheless, coverage remains exceptional. |
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