MOODY'S ASSIGNS 'MIG 1' RATINGS TO $400 MILLION SHORT-TERM MUNICIPAL ASSISTANCE CORPORATION BONDS
MOODY'S ASSIGNS 'MIG 1' RATINGS TO $400 MILLION
SHORT-TERM MUNICIPAL ASSISTANCE CORPORATION BONDS
NEW YORK, Feb. 19 /PRNewswire/ -- Effective today, Moody's Investors Service assigned "MIG 1" ratings to each of the five maturities of the Municipal Assistance Corporation for the city of New York's $400 million Series B bonds.
The Series B bonds, expected to be sold through negotiation today, are being issued under the corporation's 1991 resolution and will mature from July 15, 1992, through July 15, 1994. Through this issuance, the corporation will fully refund the last of its original first resolution bonds. The refunding is expected to produce present value savings of approximately $57 million and budget savings for the city of approximately $100 million, $100 million and $300 million in fiscal years 1993, 1994 and 1995, respectively.
This second issuance under MAC's 1991 resolution benefits from strong historical coverage and the corporation's conservative approach to debt management. MAC's unique character permits the development of meaningful cash flow projections for the life of these short-term bonds and allows for the assignment of the "MIG" ratings. These projections demonstrate ample coverage for the repayment of principal and interest even under a variety of harsh scenarios, such as a 10 percent decline in sales tax revenues and the issuance of the entire $1 billion of additional bonds currently authorized under the 1991 resolution.
While it is recognized that expansion of authorization beyond the existing $1 billion would place demands on future MAC revenues, and recent proposals have surfaced for a MAC role in assisting the city in meeting its future capital needs, it is Moody's expectation that the likely timing of such an issuance would place the primary impact of the proposals beyond the life of the current offering.
/CONTACT: Daniel N. Heimowitz, 212-553-0340, or Kenneth B. Kurtz, 212-553-0834, both of Moody's/ CO: Municipal Assistance Corporation ST: New York IN: SU: RTG SM-CK -- NY085 -- 0668 02/19/92 17:18 EST