June 12, 2015
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DIVISION OF BUDGET ANNOUNCES SUCCESSFUL BOND SALE, HIGHLIGHTING INVESTOR CONFIDENCE IN NEW YORK |
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The New York State Division of Budget today announced the successful results of the sale of $1,170,800,000 in New York State Personal Income Tax Revenue Bonds. Investors once again demonstrated high confidence in the direction of New York. For the fifth consecutive year, New York passed a timely and honestly balanced budget that holds spending growth below two percent, reversing decades of dysfunction. “Today’s bond sale is further proof that New York State is in its best fiscal position in many years,” State Budget Director Mary Beth Labate said. “With money in the bank, growing reserves and more surpluses on the horizon, Governor Cuomo has given investors reason for confidence.”
“These bonds were sold on a competitive basis which resulted in aggressive bids with favorable rates for the State. Tranching the largest series was an effective way to encourage aggressive bidding,” said Gerrard P. Bushell, DASNY Acting President & CEO. The positive reaction by the market to New York’s bond offering echoes the positive reception from the rating agencies. In rating the bonds Aa1, Moody’s Investor Services points to New York’s “strong financial management with stable reserves and low unfunded pension liability.” Moody’s gave the bonds a stable outlook, reflecting their “expectations that the State will preserve and improve upon the gains it has made in governance and its financial position.” Standard and Poor’s gave the PIT Revenue Bonds their highest rating, AAA. In their rating of the bonds, S&P points to New York’s “very strong coverage” and the economic diversity of the State. The departure from a history of political gridlock reflected in five consecutive timely budgets contributed to the upgrading of New York’s credit rating in 2014 by all three major rating agencies. Moody’s Investor Services upgraded New York’s General Obligation bonds to Aa1, their highest rating of the State since 1964, and Fitch Ratings upgraded New York to AA+, their highest rating ever for the State. Standard and Poor’s upgraded New York’s GO bonds to AA+, their highest rating since 1972. “New York has reversed historic financial management patterns and now benefits from a sustained record of on-time budgets, contained spending growth, and lack of reliance on external borrowing for liquidity purposes,” said Moody’s Investor Services in their upgrading of New York. “The shift to more moderate spending increases signals a more sustainable approach to state finances.” The State’s Capital Plan includes $11.2 billion in FY 2016 capital infrastructure spending, appropriately financed through a combination of bonds and pay-as-you-go, as approved by the State Legislature. Improved debt practices and capital management under Governor Andrew M. Cuomo include coordinated capital planning through the NY Works Task Force and the creation of the first-ever 10-year Statewide Capital Plan. New York State will continue to remain within its debt limit, and measures of debt affordability are steadily improving:
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