Printer Friendly

Fitch Rates YMCA of Greater New York $34.7MM 2007 Rfdg Rev Bonds 'BBB+'.

NEW YORK -- Fitch assigns a 'BBB+' rating to the YMCA of Greater New York's $34.7 million series 2007 bonds civic facility refunding revenue bonds and affirms its 'BBB+' rating on outstanding series 1997, 2002 and 2006 parity bonds. Proceeds will be used to refund outstanding series 1997 and 2002 bonds. The series 2007 revenue bonds will be sold via negotiation during the week of Jan. 29 by Goldman, Sachs & Co. The Rating Outlook is stable.

The rating reflects the YMCA of Greater New York's (the YMCA, or the association) improving revenue and operating trends, favorable business prospects and strong net asset position. The rating is also supported by the association's long history, community reputation, large membership base serving over 350,000 adults and youths, and status as the city's leading community-based youth services provider with long-standing programmatic ties to the City of New York. A formidable governing board and new management are focused on membership growth and retention, capital and service improvements, and ensuring the association's financial viability with better cost and financial controls.

For the fiscal year ended Dec. 31, 2005, the YMCA posted operating revenues of $128.7 million with net operating income of $5.4 million, equivalent to a 4.2% operating margin. Eleven-month interim results as of Nov. 30, 2006 reflect a positive revenue and operating trend due to an 11% increase in revenues and effective cost controls. Revenues are trending higher due to membership growth and price increases. Interim operating results have improved by over $6 million due to the opening and ramp-up of new facilities and system-wide membership growth. The YMCA's net assets have continued to grow through fiscal 2006. Consequently, 11-month interim results as of Nov. 30, 2006 reflect a ratio of total net assets to liabilities and net assets equal to 60%. This strong net asset position provides an ample cushion for compliance with debt covenants.

The principal credit risks are the YMCA's limited liquidity, and increased reliance on short-term debt for working capital and interim capital project financing needs. As of Nov. 30, 2006, available cash and investment excluding restricted endowment funds totaled about $34.8 million, comparable to fiscal 2005 levels. The YMCA has improved its current ratio and reduced accounts payable. Available funds, excluding restricted endowment assets, cover only 42% of pro forma debt adjusted for peak borrowings under the capital line of credit. Liquidity risks are exacerbated by a high 75% exposure to equity investments and management's desire to replenish certain aging capital assets. In the absence of another significant capital campaign, management will not be able to shore up cash reserves until the capital projects are completed by fiscal 2008, capital spending moderates, and grant reimbursement has been collected to pay off the capital line of credit.

The YMCA plans to execute a $16 million capital line of credit with JP Morgan Chase. Peak borrowings under the line of credit are expected to reach $8 million and are expected to be repaid on or before fiscal 2009 with proceeds from grants, gifts and/or operating cash flow. Pro forma maximum annual debt service coverage on all debt, assuming a 30-year amortization of short-term debt under the capital line of credit, is 2.9 times (x) in fiscal 2005. Based on increased revenues and EBITDA, debt ratios are expected to improve in fiscal 2006. Any material reduction in liquidity or increase in debt could have a negative impact on the Outlook and rating.

The YMCA of Greater New York is a not-for-profit, community service organization with 19 branches located throughout the five boroughs of New York City and in resident camps in upstate NY. This YMCA is the nation's largest YMCA and has operated since 1852. The association provides health enhancement, residence, community development, child and teen development, camping and international programs.

Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.
COPYRIGHT 2007 Business Wire
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2007, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Publication:Business Wire
Date:Jan 12, 2007
Previous Article:Research and Markets: Danish Crown 2006 Company Profile Addresses All The Key Issues That Confront The Company.
Next Article:Fitch Teleconference: 2007 U.S. Water & Sewer Revenue Bond Medians 1/17 2PM ET.

Related Articles
Fitch Rates Northside ISD, Texas' 2006A Refunding Bonds 'AAA/F1+'.
Fitch Rates Tacoma, Washington's $21.7MM Solid Waste Utility Revs 'A'; Affirms Outstanding.
Fitch Rtes Pennsylvania Sch Bldg Auth $834MM Lease Revs A+'; Lowers Phila. School District to 'BBB-'.
Fitch Rates Fletcher Allen's 2007 Bonds 'BBB+'; Upgrades Outstanding Debt.
Fitch Updates U.S. Tobacco Settlement ABS Criteria to Include 'B' Bonds.
Fitch Rates MedStar's 2007 Bonds 'BBB+'; Outlook to Positive.
Fitch Rates Philadelphia, Pennsylvania's Gas Works Revs 'BBB/BBB-'; Stable Outlook.
Fitch Rts Goodwin House's (Fairfax County, Virginia) $147.4MM Ser 2007 Bonds 'BBB'; Outlook Stable.
Fitch Rates Los Angeles Community Redevelopment Agency, California's $9MM TAB's 'BBB'.
Fitch Rates Syracuse, New York Public Improvement Bonds 2007A 'A' & 2007B 'BBB'; Outlook To Stable.

Terms of use | Privacy policy | Copyright © 2018 Farlex, Inc. | Feedback | For webmasters