New York St Dorm Auth's $325.96M Bnds Rtd A- by S&P.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 7/13/98--Standard & Poor's today assigned its single-'A'-minus rating to 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 State Dormitory Authority's $325.96 million mental health services health services Managed care The benefits covered under a health contract facilities improvement revenue bonds series 1998D issued for New York. In addition, Standard & Poor's affirmed its single-'A'-minus rating on the authority's $172.0 million mental health services facilities improvement revenue bonds. The rating reflects the state's general creditworthiness Creditworthiness The condition in which the risk of default on a debt obligation by that entity is deemed low. Creditworthiness Eligibility of an individual or firm to borrow money. (single-'A' G.O. rating), substantial funds allocated by New York state statute for debt repayment including federal Medicaid reimbursement, strong project essentiality and the security provided by a master financing agreements Financing Agreements In the context of project financing, the documents which provide the project financing and sponsor support for the project as defined in the project contracts. adopted in 1996 which cover both state projects and voluntary agency projects. Additional credit support not found in other New York State contractual obligations is the existence of a special mental health services (MHS (1) (Message Handling Service) An earlier messaging system from Novell that supported multiple operating systems and other messaging protocols, including SMTP, SNADS and X.400. It used the SMF-71 messaging format. ) fund. This is supported by dedicated federal, state, private insurance, and third party beneficiary A third party beneficiary, in the law of contracts, is a person who may have the right to sue on a contract, despite not having originally been a party to the contract. This right arises where the third party is the intended beneficiary of the contract, as opposed to an incidental payments. This fund is the primary reason Standard & Poor's rating on debt issues under the prior and current resolution are rated above other contractual state debt obligations. Dollars that flow into this fund are paid to the state as reimbursement for mental health services provided by the Department of Mental Hygiene mental hygiene, the science of promoting mental health and preventing mental illness through the application of psychiatry and psychology. A more commonly used term today is mental health. and once received cannot be used for any other state purpose. Under New York state statute, monies deposited into the MHS fund must first go to meet debt service obligations under a formula which would satisfy those requirements. Present coverage of debt service from monies allocated to that fund exceed debt service by over five times. However, this feature does not allow for a higher rating. Monies available for debt service must compete with operations as the state must first provide the service in order to receive any federal funds Federal Funds Funds deposited to regional Federal Reserve Banks by commercial banks, including funds in excess of reserve requirements. Notes: These non-interest bearing deposits are lent out at the Fed funds rate to other banks unable to meet overnight reserve . In addition, as the state moves to a community based service delivery system, monies directly attributable to state institutions will decline reducing the monies realistically available for debt service, although the debt service repayment ultimately relies on annual state appropriations to the Department of Mental Hygiene. Once appropriated, payments are absolute and unconditional. The state's credit factors include a substantial and diverse economic base that continues to experience modest expansion after the prolonged recession of the early 1990s, above average income levels, high debt levels, improved financial operations and position on a cash and GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). basis through fiscal 1998, and an accumulated fund balance deficit position on a GAAP basis, albeit at a reduced level. OUTLOOK: STABLE The outlook mirrors the state's G.O. bonds stable outlook which reflects expectations that while the state could face future budgetary pressures if economic conditions fall short of expectations, it will make any necessary corrections ensuring continued fiscal balance on an annual basis, Standard & Poor's said. -- CreditWire
CONTACT: Kathleen Quail, New York, 212/208-1377
Richard J. Marino, New York, 212/208-1890
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