RATING NEWS: Troy Rating Placed Under Formal Review As City Misses Payment On Lease Bonds.NEW YORK--(BUSINESS WIRE)--Sept. 16, 1996-- Moody's has placed the B rating on the general obligation bonds of the City of Troy, New York Troy is a city in New York, U.S., and the county seat of Rensselaer County. As of the 2000 census, the population was 49,170; in 1910, the population was 76,813. The city's motto is Ilium fuit, Troja est, which means "Troy was, Troy is. under formal review based on the city's failure to make a September 15 debt service payment of $1.4 million on the 1992 Troy Industrial Development Authority Lease Revenue bonds. The lease revenue bonds, with $34.3 million outstanding, are unrated. The city did not appropriate funds for this payment in its current budget. Instead, it sought to refinance the obligation, but was unable to reach a timely agreement with bondholders. The city expected to refinance this lease obligation as part of the Troy Municipal Assistance Corporation's (MAC) planned issuance of $75.3 million in bonds, to be secured by sales taxes 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. and state aid received by the city. However, the city was unable to resolve lease-related bondholder issues to provide for sufficient time for the MAC to issue its bonds prior to the September lease payment. On September 13, the city reached an agreement with bondholders which waives the September 15 payment and sets a conceptual framework For the concept in aesthetics and art criticism, see . A conceptual framework is used in research to outline possible courses of action or to present a preferred approach to a system analysis project. for the proposed MAC financing. A detailed financial analysis of the agreement is currently being enumerated This term is often used in law as equivalent to mentioned specifically, designated, or expressly named or granted; as in speaking of enumerated governmental powers, items of property, or articles in a tariff schedule. by the city and bondholders. A final agreement must then be approved by the city council, the MAC board, and the Troy Supervisory Board Supervisory board The board of directors that represents stakeholders in the governance of the corporation. in order for the MAC debt issuance to occur. Absent approval by any of these parties, the city faces significant, additional uncertainty. The city issued the lease bonds in 1992, effectively mortgaging city hall and municipal parking lots, to fund an operating deficit and various capital projects. After tapping into the issue's reserve fund to make its lease payment on March 15, 1996, the city neither replenished that fund nor appropriated for the upcoming payment. Moody's will continue to monitor the city's credit standing as details of the proposed MAC financing become finalized and we can assess its impact on city fiscal operations. We will also evaluate the city's new management and assess its ability to achieve a balanced budget Balanced budget A budget in which the income equals expenditure. See: budget. balanced budget A budget in which the expenditures incurred during a given period are matched by revenues. by year-end. CONTACT: Marcy S Marcy or Marcie may refer to: People
Assistant Vice President Public Finance Group 212/553-1057 or Brad Gewehr Vice President/Assistant Director 212/553-4789 |
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