KBRA Assigns AA+ Rating to State of New York General Obligation Bonds Series 2026A Tax-Exempt Bonds (Sustainability Bonds) and General Obligation Bonds Series 2026B Taxable Bonds (Sustainability Bonds); Affirms Rating for Parity Bonds

NEW YORK--(BUSINESS WIRE)--KBRA assigns a long-term rating of AA+ to the State of New York General Obligation Bonds Series 2026A Tax-Exempt Bonds (Sustainability Bonds) and General Obligation Bonds Series 2026B Taxable Bonds (Sustainability Bonds). KBRA additionally affirms the long-term rating of AA+ for the State's outstanding General Obligation Bonds. The rating Outlook is Stable.

Key Credit Considerations

The rating actions reflect the following key credit considerations:

Credit Positives

• Broad statewide resource base contributes to economic resiliency.
• Demonstrated record of closing budget gaps using a combination of spending restraint and offsetting budgetary actions.
• Manageably low fixed cost burden enhances financial flexibility.

Credit Challenges

• PIT receipts comprise a large portion of the revenue based and depend heavily on labor market strength and capital gains tied to financial sector performance.
• Medicaid spending growth is projected to continue to outpace available resources.
• HR 1 is projected to increase State costs over the financial plan period, exacerbating outyear budgetary gaps.
• The State’s high cost and tax structure may contribute to population and business outmigration.

Rating Sensitivities

For Upgrade

• Trend of stable to increasing State tax receipts indicative of economic resiliency and growth in the State resource base.
• Continued adherence to spending caps and progress towards achieving long-term structural balance.

For Downgrade

• Failure of the Governor and Legislature to act, when and if necessary, to maintain budgetary balance.
• Significant depletion of reserves to fund operations, reliance on non-recurring revenues to maintain budgetary balance, or the use of deficit financing.

To access ratings and relevant documents, click here.

Methodology

• Public Finance: U.S. State General Obligation 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), one of the major credit rating agencies (CRA), is a full-service CRA 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 (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1016934