KBRA assigns long-term ratings of AA+ with a Stable Outlook to The City of New York's General Obligation Bonds, Fiscal 2025 Series A and Fiscal 2025 Series B. Concurrently, KBRA affirms the AA+ rating and Stable Outlook on the City's outstanding General Obligation Bonds.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

• New York City’s prominence as an international business and cultural center, the nation’s largest city, and the center of a large, metropolitan economy underscores the diversity and resiliency of the economic resource base supporting the G.O. Bonds.
• Institutionalized, long-range financial management and capital planning practices support financial stability.
• Total reserves, pension funded ratios and unfunded liabilities have trended positively in recent years, while annual debt service requirements continue to be maintained at below 15 percent of City tax revenues.

Credit Challenges

• The City’s economic base, though broad, remains susceptible to financial services sector cyclicality, although reliance has moderated with increasing diversification.
• Despite greater clarity regarding the City’s plan to address asylum seeker costs, expenditure pressures are likely to persist, particularly in the absence of significant Federal and/or State funding to assist the City in handling a continued influx in asylum seekers. The crisis may also pressure provision of services and have quality of life implications.
• New York City’s coastal location creates exposure to coastal and inland flooding, as well as extreme heat, the mitigation of which entails significant city, state, and federal investment over the long-term.

Rating Sensitivities

For Upgrade

• Maintenance of sound fiscal posture, budgetary flexibility, employment growth and revenue resiliency in the face of prevailing economic and social headwinds.
• Adoption of a formalized reserve policy targeting the size of reserves and conditions for withdrawal.
• Trend of reduced or eliminated projected out-year budget gaps.

For Downgrade

• Secular economic decline and/or deterioration in a key economic segment, such as commercial real estate, of sufficient magnitude to challenge budgetary balance.
• Relaxation of, or less adherence to, well-established policies and procedures.

To access rating and relevant documents, click here.

Methodologies

• Public Finance: U.S. Local Government General 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.

Only those ratings on securities issued by this Issuer that also are denoted on the Security Ratings tab for this Issuer on KBRA.com as “endorsed” by Kroll Bond Rating Agency Europe Limited into the European Union and/or by Kroll Bond Rating Agency UK Limited into the UK are covered by the disclosures set forth in this press release and the corresponding Information Disclosure Form. No other ratings on issuances by this Issuer have been endorsed into the European Union or the UK, and the disclosures set forth herein and in the corresponding Information Disclosure Form are inapplicable to those ratings and may not be used for regulatory purposes by European Union or UK investors in these securities.

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: 1005220

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