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NEW YORK CITY $656 MILLION GENERAL OBLIGATION BONDS RATED 'A-' BY FITCH -- FITCH FINANCIAL WIRE --

 NEW YORK, Dec. 6 /PRNewswire/ -- The fixed rate portion of approximately $656 million New York City general obligation bonds, fiscal 1994 series E & F selling this week, is rated 'A-' by Fitch. The new issue, to be offered through negotiation tomorrow by a Prudential Securities Inc.-led syndicate, may include derivative products. The city's outstanding 'A-' general obligation debt is affirmed. The credit trend is stable but recognizes the city's ongoing need to address projected out-year budget gaps.
 The city's general obligation bonds were last rated three weeks ago in conjunction with a bond sale. The first quarter modification to the Financial Plan was submitted to the Financial Control Board Nov. 23. The modification identified additional expenditures for this year that are offset by additional resources. However, the additional spending increases the subsequent years' spending base without a commensurate increase in ongoing resources, expanding the already large projected structural funding gaps. A report by a three-member panel commissioned by the mayor last May recently was released with recommendations for achieving structural budget balance. The report presented a broad array of spending and revenue-raising recommendations to address the projected budget gaps, which it also concluded were larger than those reported in the city's financial plan modification. A new mayor takes office Jan. 1 and should submit in January the preliminary 1995 budget and updated financial plan, which in practice lays out how the budget will be balanced.
 New York City possesses inherent strength in the sheer scope and diversity of its unique economic base. It also has demonstrated effective budget management and controls by consistently achieving operating surpluses despite adverse economic conditions. Employment losses continue this year, although the rate of decline has decreased. October 1993 employment was about 1% below the October 1992 level.
 -0- 12/6/93
 /CONTACT: Richard J. Raphael of Fitch, 212-908-0506/


CO: ST: New York IN: SU: RTG

JG -- NY094 -- 0906 12/06/93 15:40 EST
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Publication:PR Newswire
Date:Dec 6, 1993
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