MuniMetrics MVP v6.6.5

# Senior Credit Analyst Summary ## 1. Executive Credit View Preliminary only. The provided excerpt is primarily from the State of New York FY2025 Annual Comprehensive Financial Report table of contents and limited scanned excerpts, not the bond official statement. It confirms the issuer and the existence of statewide financial reporting, but it does **not** provide enough bond-specific information to support a definitive Buy, Watch, or Pass view. Based only on the excerpt, the implication is **Preliminary Watch** pending review of the official statement, full ACFR financial tables, debt service schedule, ratings reports, and continuing disclosure. The main reasons are the lack of bond-specific security details and the presence of items that may affect recurring credit analysis, including federal grant-related revenue and COVID-era suspension of the Debt Reform Act. Pages 11, 30, 33, 36, and 227. ## 2. Issuer and Bond Facts Extracted | Item | Extracted Fact | |---|---| | Issuer | State of New York. Page 1. | | Bond name | The analyst context identifies Series 2025A Tax-Exempt Bonds, Series 2025B Taxable Bonds, and Series 2025C Tax-Exempt Refunding Bonds; not identified in provided ACFR excerpt. | | Par amount | Not identified in provided excerpt. | | Bond type | Analyst context identifies General Obligation; specific GO pledge not identified in provided excerpt. | | Security pledge | Not identified in provided excerpt. | | Purpose | Not identified in provided excerpt. | | Maturity range | Not identified in provided excerpt. | | Rating | Not identified in provided excerpt. | | Underwriter | Not identified in provided excerpt. | | Bond counsel | Not identified in provided excerpt. | | Municipal advisor | Not identified in provided excerpt. | | Registrar / paying agent | Not identified in provided excerpt. | | Tax status | Analyst context identifies Series 2025A and Series 2025C as tax-exempt and Series 2025B as taxable; not identified in provided ACFR excerpt. | | Source document reviewed | State of New York Annual Comprehensive Financial Report for fiscal year ended March 31, 2025. Page 1. | | Prepared by | Office of the New York State Comptroller, Thomas P. DiNapoli. Page 3. | ## 3. Security and Bond Structure Analysis The excerpt does **not** provide the specific repayment pledge, constitutional or statutory security language, full faith and credit language, debt service fund mechanics, or remedies for the Series 2025A/B/C bonds. Therefore, the credit analysis cannot yet confirm the strength of the bondholder claim. Bond structure details are also not identified in the provided excerpt, including: - Amortization schedule: Not identified in provided excerpt. - Serial or term bond structure: Not identified in provided excerpt. - Sinking fund requirements: Not identified in provided excerpt. - Call and redemption provisions: Not identified in provided excerpt. - Refunding economics for Series 2025C: Not identified in provided excerpt. - Debt service schedule: Not identified in provided excerpt. - Additional bonds test: Not identified in provided excerpt. - Reserve fund, if any: Not identified in provided excerpt. One structural and credit governance item is identified: State legislation connected with the enacted budgets for fiscal years 2020-21 and 2021-22 suspended the Debt Reform Act as part of the State response to the COVID-19 pandemic. Page 36. This is not a bond-specific default risk factor by itself, but it is a watch item because it may have affected debt constraint discipline or debt capacity during the pandemic period. ## 4. Credit Strengths Supported positives from the excerpt are limited but include: 1. **State-level issuer with formal audited financial reporting framework** The document is the State of New York Annual Comprehensive Financial Report for fiscal year ended March 31, 2025. Page 1. 2. **Financial reporting prepared by the Office of the State Comptroller** The ACFR was prepared by the Office of the New York State Comptroller. Page 3. 3. **Independent audit and full financial statement package appear included in the ACFR** The table of contents identifies an Independent Auditors’ Report, Management’s Discussion and Analysis, basic financial statements, notes, required supplementary information, other supplementary information, and statistical section. Pages 4-7. 4. **Presence of detailed pension and OPEB supplemental schedules** The table of contents includes multiple schedules for OPEB and pension liabilities, employer contributions, and related ratios. Pages 4-5. This is positive from a disclosure perspective, though the excerpt does not provide the actual liability amounts or funded status. 5. **Federal grant and tax revenues contributed to reported financial changes** The excerpt states that a change was primarily related to increased revenue from federal grants and taxes that were not yet spent or did not result in an offsetting liability. Page 11. This can be positive for near-term reported balances, but recurring quality requires further analysis. ## 5. Credit Risks and Watch Items 1. **Insufficient bond-specific security information** The excerpt does not provide the specific GO pledge, constitutional authority, debt service payment mechanics, legal remedies, call features, maturity schedule, or debt service requirements. 2. **COVID-era suspension of the Debt Reform Act** State legislation authorized in connection with the enacted budgets for fiscal years 2020-21 and 2021-22 suspended the Debt Reform Act as part of the State response to the COVID-19 pandemic. Page 36. This may be relevant to debt affordability and governance analysis, but the excerpt does not quantify the debt impact. 3. **Federal grants appear to have affected reported financial position** The excerpt states that increased revenue from federal grants and taxes was not yet spent or did not result in an offsetting liability. Page 11. This may mean reported balances include funds that are not recurring or may be restricted, depending on the grant source and purpose. 4. **Use of grants and other revenues to fund governmental activities** The State paid the remaining “public benefit” portion of governmental activities with $122.6 billion in taxes and $27.5 billion in unrestricted grants and other revenues, including investment earnings. Page 30. This suggests grants and other revenues supported governmental activity costs, but the excerpt does not identify whether the grant component was recurring, federal, restricted, or pandemic-related. 5. **Miscellaneous receipts exceeded estimates due partly to reimbursements** Miscellaneous receipts exceeded initial estimates due mainly to abandoned property, reimbursements, and licenses and fees. Page 33. Reimbursements can be credit-neutral or positive if they offset eligible spending, but may not represent recurring own-source operating revenue. 6. **Pension and OPEB exposure likely material but not quantifiable from excerpt** The ACFR table of contents includes numerous pension and OPEB schedules. Pages 4-5. However, the excerpt does not provide the actual liability amounts, contribution trends, or funded ratios. 7. **Debt profile cannot be evaluated from excerpt alone** The excerpt references debt-related information and the Debt Reform Act suspension, but does not provide debt outstanding, debt service schedule, debt ratios, amortization, or future borrowing plans. ## 6. Temporary / Artificial Funding Exposure | Source / Program | Amount | Fiscal Year / Period | Apparent Use of Funds | Classification | Risk Level | Why It Matters to Recurring Credit Strength | Page | |---|---:|---|---|---|---|---|---| | COVID-19-related suspension of Debt Reform Act | Not identified | Enacted budgets for fiscal years 2020-21 and 2021-22 | Not direct funding; appears to be debt governance / statutory debt constraint relief in response to the pandemic | Unclear | Medium | This is not operating revenue, but it may have allowed debt issuance or debt policy flexibility outside normal constraints. Need quantify whether debt levels, affordability, or structural balance were affected. | Page 36 | | Federal grants and taxes not yet spent or without offsetting liability | Not identified | FY2025 context implied by ACFR, exact period not fully identified | Increased revenue; funds not yet spent or not matched by offsetting liability | Restricted Funding / Unclear | Medium | If federal grants increased reported balances, reported strength may overstate recurring own-source strength unless grants are ongoing or restricted to future eligible costs. Need identify program, restrictions, and whether any operating expenses were backfilled. | Page 11 | | Unrestricted grants and other revenues, including investment earnings | $27.5 billion combined category | Not identified in excerpt | Paid remaining “public benefit” portion of governmental activities along with $122.6 billion in taxes | Operating Support / Unclear | Medium | The excerpt indicates grants and other revenues helped pay governmental activities. Because the $27.5 billion category combines grants, other revenues, and investment earnings, recurring quality cannot be determined. If grants were temporary, operating strength may be overstated. | Page 30 | | Reimbursements within miscellaneous receipts | Not identified | Not identified | Miscellaneous receipts exceeded initial estimates due mainly to abandoned property, reimbursements, and licenses and fees | Reimbursement Funding | Low to Medium | Reimbursements may be appropriate cost recovery and not necessarily weak credit support. However, they may not recur and should not be treated the same as recurring tax revenue without more detail. | Page