Fitch has assigned an AA+ rating to $600+ million in new general obligation bonds offered by New York state, marking an affirmation of the state’s previous rating.
The state’s outlook also stayed negative; Fitch noted that although the public health situation in the state has improved, its economic outlook remains uncertain.
The aid provided by the recent stimulus package also played a part. From Fitch:
The state entered the crisis from a position of relative strength, benefitting from high wealth, a diverse although cyclical revenue profile, a comparatively low burden of direct debt and pensions, very strong gap-closing ability, and responsive budget management.
Fitch expects the massive influx of federal aid from the American Rescue Plan Act of 2021 (ARP) to bolster the nascent economic recovery and provide material, albeit temporary, support to New York State and its schools, local governments, transit systems and other public entities during 2021 and beyond.
The impact of the ARP on New York State remains unclear, although the projected $12.6 billion in direct assistance exceeds a $6 billion placeholder assumed by the state in its budget. Fitch expects to review New York’s IDR again after enactment of the budget for fiscal 2022, which begins on April 1, and once Fitch has additional guidance on how the new federal relief is expected to be allocated.