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Fitch Affirms Battery Park City Authority, NY Senior Rev Bonds at 'AAA'; Outlook Stable

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June 13, 2024


Fitch Ratings has affirmed the following Battery Park City Authority, NY (BPCA) revenue bonds:

--Outstanding senior lien revenue bonds series 2023A, B&C and series 2019A, B&C at 'AAA';

--Outstanding junior lien revenue bonds series 2019D-1 and series 2019D-2 (and associated bank bonds) at 'AA+'.

The Rating Outlook is Stable.

The 'AAA' and 'AA+' ratings on the senior and junior lien bonds, respectively, reflect solid growth prospects for pledged revenues and expected strong resilience to revenue declines, which offset concerns about concentration risk of commercial office properties and the financial services sector. The potential for higher leverage leads to slightly weaker resilience for the junior lien bonds and warrants the one-notch distinction.

Fitch's dedicated tax analysis considers full leveraging up to the authority's general resolution additional bonds test (ABT) for both the senior and junior liens, despite the potentially lower issuance resulting from New York City's role in oversight and the approval of BPCA's debt issuance. The tests essentially allow bonds if current pledged revenues cover pro forma debt service by 2x for senior lien bonds and 1.55x for junior and senior lien bonds.

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