April 1, 2020 – In a move not unexpected to municipal market participants, Moody’s revised its outlook for New York State to “Negative” from “Stable”.

The rating agency also affirmed the state’s “Aa1” rating for its GO, personal income tax and sales tax credits.

In a report released late afternoon, Moody’s New York State lead analyst, Marcia Van Wagner, wrote:

“Today’s action affirming New York’s ratings and revising the outlook to negative from stable reflects the impact of the coronavirus crisis on the state of New York and our expectation that the crisis will have substantial impacts on state finances and the economy, eating into the state’s reserves and straining its ability to structurally balance its budget.

The rating action also incorporates the mitigating impacts of substantial federal emergency assistance, which will bolster household income and spending and therefore tax revenue, provide aid to hospitals, reimburse state and local governments for coronavirus-related spending and could potentially provide additional federal Medicaid reimbursement if certain obstacles for New York are overcome.”

Contact Caren Moses at CMoses@buymuni.com.