Moody's: De Blasio Plan Credit Neutral for Housing Agency
Mayor Bill de Blasio's 10-year plan to build and preserve affordable housing units is credit neutral for New York City, according to Moody's Investors Service.
The plan anticipates that the city's Housing Development Corp., which Moody's rates Aa2, will contribute through its financing programs and other activities.
"We do not anticipate that the plan will [affect] the credit quality of HDC and its primary programs, including the [Aa2] multi-family housing revenue bonds and the [Aa1] multi-family secured mortgage revenue bonds," Moody's said in a May 13 report.
Since 2003, according to Moody's, HDC also participated in the affordable housing plan under previous Mayor Michael Bloomberg, under which bonds and loans outstanding spiked substantially while the credit quality of HDC and their bond programs remained strong.
During this time period, while bonds outstanding increased more than 160%, HDC's asset-to-debt ratios hovered around 130% and average profitability remained above 5%. "We expect similar stable performance from HDC's participation in Mayor de Blasio's plan," Moody's said in a statement.
One day earlier, Moody's called the de Blasio's $73.9 billion budget plan a credit negative, citing the effect of the proposed contract settlement with teachers on out-year budget gaps.
"There has been no change in the city's credit rating whatsoever. Moody's has not issued its credit report on the city," Amy Spitalnick, director of public affairs for the Mayor's Office of Management and Budget, said in response. "In a document unrelated to the city's formal credit rating process, an analyst at Moody's pointed out that we added expenses for the contract settlements -- just as they also pointed out the prior week that those same settlements eliminated a major risk from the city's financial plan."
Moody's rates the city's general obligation bonds Aa2. Fitch Ratings and Standard & Poor's rate them AA.