KBRA Assigns AAA Rating with Stable Outlook to Dormitory Authority of the State of New York State Sales Tax Revenue Bonds, Series 2024A (Tax-Exempt)
08 Julio 2024 - 1:38PM
Business Wire
KBRA assigns a long-term rating of AAA with a Stable outlook to
the Dormitory Authority of the State of New York (DASNY) State
Sales Tax Revenue Bonds, Series 2024A (Tax-Exempt).
Key Credit Considerations
The rating was assigned because of the following key credit
considerations:
Credit Positives
- Provisions of the Enabling Act and the importance of sales tax
revenues to state operations mitigates the risk of legislative
non-appropriation of financing agreement payments or a failure to
pay such payments when due after amounts have been appropriated and
set aside in the Sales Tax Revenue Bond Tax Fund (STRBTF).
- STRBTF Receipts provide ample historical and projected coverage
of maximum annual debt service.
- Overleveraging of the revenue stream is unlikely given the
strong 2.0x additional bonds test, as well as the State’s reliance
on excess sales tax revenues for operations.
- The potential for a diversion in the flow of STRBTF Receipts in
the event of a budgetary delay or a severe fiscal distress, while
not non-existent, is extremely remote, in KBRA’s view.
Credit Challenges
- Financing agreement payments are subject to annual
appropriation and executory only to the extent of amounts available
in the STRBTF.
- Sales tax receipts are inherently sensitive to cyclical
economic conditions, demographics, inflation, financial market
volatility, and exogenous events such as recessions and
pandemics.
Rating Sensitivities
For Upgrade
For Downgrade
- A trend of declining debt service coverage that approaches the
2.0x ABT level.
- A failure by the State legislature to annually appropriate
amounts required to make financing agreement payments.
- Action by the State to amend, repeal or alter statutes relating
to the State Sales Tax or the State Sales Tax Revenue Bond
Financing Program that negatively impact revenues available for
financing agreement payments.
To access rating and relevant documents, click here.
Methodologies
- Public Finance: U.S. Special Tax Revenue Bond Rating
Methodology
- Public Finance: U.S. State Annual Appropriation Obligation
Rating Methodology
- ESG Global Rating Methodology
Disclosures
A description of all substantially material sources that were
used to prepare the credit rating and information on the
methodology(ies) (inclusive of any material models and sensitivity
analyses of the relevant key rating assumptions, as applicable)
used in determining the credit rating is available in the
Information Disclosure Form(s) located here.
Information on the meaning of each rating category can be
located here.
Further disclosures relating to this rating action are available
in the Information Disclosure Form(s) referenced above. Additional
information regarding KBRA policies, methodologies, rating scales
and disclosures are available at www.kbra.com.
About KBRA
Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit
rating agency registered with the U.S. Securities and Exchange
Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is
registered as a CRA with the European Securities and Markets
Authority. Kroll Bond Rating Agency UK Limited is registered as a
CRA with the UK Financial Conduct Authority. In addition, KBRA is
designated as a designated rating organization by the Ontario
Securities Commission for issuers of asset-backed securities to
file a short form prospectus or shelf prospectus. KBRA is also
recognized by the National Association of Insurance Commissioners
as a Credit Rating Provider.
Doc ID: 1005019
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Analytical Contacts
Linda Vanderperre, Senior Director (Lead Analyst) +1
646-731-2482 linda.vanderperre@kbra.com
Peter Scherer, Senior Director +1 646-731-2325
peter.scherer@kbra.com
Karen Daly, Senior Managing Director (Rating Committee Chair) +1
646-731-2347 karen.daly@kbra.com
Business Development Contacts
William Baneky, Managing Director +1 646-731-2409
william.baneky@kbra.com
James Kissane, Senior Director +1 646-731-2380
james.kissane@kbra.com