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MOODY'S CONFIRMS 'A' RATING ON NEW YORK CITY MUNICIPAL WATER AUTHORITY REVENUES BONDS

 MOODY'S CONFIRMS 'A' RATING ON NEW YORK CITY
 MUNICIPAL WATER AUTHORITY REVENUES BONDS
 NEW YORK, Oct. 5 /PRNewswire/ -- Effective today, Moody's Investors Service has confirmed the "A" rating on the New York City Municipal Water Finance Authority revenue bonds in conjunction with the planned sale of $125 million of water and sewer system revenue bonds, fixed rate fiscal 1993 Series B bonds.
 It is anticipated that $100 million adjustable rate fiscal 1993 Series C bonds will be simultaneously offered for sale, with principal and interest payments to be insured by FGIC, which will also provide a liquidity facility in the form of a standby bond purchase agreement. Moody's rating on the Series C bonds is pending.
 The planned sale includes the authority's first issuance of variable rate debt. Given the relatively modest amount of the Series C bonds in proportion to its total debt, the authority's initial exposure to the risks of interest rate fluctuations appears manageable. Officials anticipate that future issues will increase the share of variable rate bonds to 5 percent to 10 percent of total long-term debt. As this share rises, so do the potential risks, and conservative budgeting for debt service on variable rate obligations will become increasingly important to the authority's ability to continue to meet its rate covenant. Moody's will closely monitor the authority's experience with variable rate debt.
 Satisfactory financial performance has been derived from the system's historical willingness to implement substantial annual rate increases as needed to ensure compliance with revenue bond legal covenants. Rates are set at a level sufficient to cover all system operating and maintenance expenses and 1.15 times authority debt service, as well as rental payments to the city. Rental payments are capped at a level equal to the greater of the city's debt service payments on city general obligation bonds issued for water and sewer purposes, or 15 percent of the authority's annual debt service. These city rental payments, currently equal to city water and sewer debt service needs, have been at the maximum level since 1990.
 The essentiality of the water and sewer services provided, the size and diversity of the system, as well as a degree of independence of the system from city financial pressures, are fundamental credit strengths. Nevertheless, the authority's long-term credit position continues to rest on its ability to meet the significant challenges before it. Among these is the successful management of its $10.5 billion, ten-year capital program, most of which is essential either to maintaining the current level of service or to meeting regulatory mandates. Ongoing environmental concerns may further expand the scope of work to be undertaken.
 -0- 10/5/92
 /CONTACT: Brad Gewehr, 212-553-4789, Marie S. Pisecki, 212-553-7120, or Michael Johnston, 212-553-7810, all of Moody's/ CO: New York City Municipal Water Finance Authority ST: New York IN: UTI SU: RTG


TS-PS -- NY063 -- 6602 10/05/92 12:50 EDT
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Publication:PR Newswire
Date:Oct 5, 1992
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