Financing
Financing Program
The City financing program projects $62.7 billion of long- term borrowing for the period from 2023 through 2027 to support the current City capital program. The portion of the capital program not financed by the New York City Municipal Water Finance Authority (NYW or the Authority) will be split between General Obligation (GO) bonds of the City and Future Tax Secured (FTS) bonds of the New York City Transitional Finance Authority (TFA).
The City and TFA expect to issue $27.0 billion and $26.9 billion, respectively, during the plan period. The City issuance supports 43 percent of the total, and TFA FTS issuance supports another 43 percent of the total. NYW expects to issue approximately $8.9 billion.
2023-2027 Financing Program
($ in millions)
| 2023 | 2024 | 2025 | 2026 | 2027 | Total | |
|---|---|---|---|---|---|---|
| City General Obligation Bonds | $3,915 | $4,820 | $5,650 | $6,050 | $6,530 | $26,965 |
| TFA Bonds | 3,800 | 4,820 | 5,650 | 6,050 | 6,530 | 26,850 |
| Water Authority Bonds (1) | 1,163 | 1,557 | 1,849 | 2,054 | 2,270 | 8,893 |
| Total | $8,878 | $11,197 | $13,149 | $14,154 | $15,330 | $62,708 |
(1) Includes commercial paper and revenue bonds issued for the water and sewer system’s capital program. Figures do not include bonds that defease commercial paper or refunding bonds. Does not include bonds to fund reserves or cost of issuance.
Overview of the Financing Program
The following three tables show statistical information on debt issued and expected to be issued by the financing entities described above.
2023-2027 Debt Outstanding
($ in millions at year end)
| 2023 | 2024 | 2025 | 2026 | 2027 | |
|---|---|---|---|---|---|
| City General Obligation Bonds | $40,310 | $42,620 | $45,778 | $49,308 | $53,368 |
| TFA Bonds | 45,627 | 48,813 | 52,791 | 56,988 | 61,213 |
| TSASC Bonds | 938 | 909 | 879 | 854 | 827 |
| Conduit Debt | 931 | 863 | 794 | 726 | 656 |
| Total | $87,806 | $93,205 | $100,242 | $107,876 | $116,064 | Water Authority Bonds Bonds | 938 | 909 | 879 | 854 | 827 |
2023-2027 Annual Debt Service Costs
($ in millions, before prepayments)
| 2023 | 2024 | 2025 | 2026 | 2027 | |
|---|---|---|---|---|---|
| City General Obligation Bonds | $4,157 | $4,400 | $4,573 | $4,826 | $5,031 |
| TFA Bonds | 3,259 | 3,294 | 3,573 | 4,089 | 4,576 |
| TSASC Bonds | 76 | 76 | 76 | 69 | 69 |
| Conduit Debt | 128 | 121 | 120 | 119 | 118 |
| Total Debt Service | $7,620 | $7,891 | $8,342 | $9,103 | $9,794 |
| Water Authority Bonds Bonds(1) | $1,640 | $1,938 | $2,016 | $2,164 | $2,243 |
(1) Includes First Resolution debt service and Second Resolution debt service net of subsidy payments from the NYS Environmental Facilities Corporation.
2023-2027 Debt Burden
| 2023 | 2024 | 2025 | 2026 | 2027 | |
|---|---|---|---|---|---|
| Total Debt Service(1) as % of : | |||||
| a. Total Revenue | 6.9% | 7.3% | 7.8% | 8.5% | 9.0% |
| b. Total Taxes | 10.6% | 11.0% | 11.3% | 12.1% | 12.6% |
| c. Total NYC Personal Income | 1.1% | 1.1% | 1.1% | 1.1% | 1.1% |
| Total Debt Outstanding1 as % of : | |||||
| a. Total NYC Personal Income | 12.2% | 12.5% | 12.9% | 13.2% | 13.6% |
(1) Total Debt Service and Debt Outstanding include GO, conduit debt and TFA FTS bonds.
Currently the debt service for the City, TFA FTS, and City appropriation debt, or conduit debt, excluding the effect of prepayments, is 6.9 percent of the City’s total budgeted revenues in 2023. That ratio is projected to rise to 9.0 percent in 2027. As a percentage of tax revenues, the debt service ratio is 10.6 percent in 2023 and is projected to increase to 12.6 percent in 2027.
All of the issuers financing the City capital program have maintained credit ratings in the AA category or better by Moody’s, S&P, and Fitch, and in the case of the City, Kroll, as indicated in the table below. Following the economic uncertainty caused by the onset of COVID-19, the credit ratings assigned to the issuers financing most of the City’s capital program came under pressure. Since then, all the ratings have returned to the levels that prevailed before the onset of COVID-19, except for the Moody’s rating on the City General Obligation credit. In February, Fitch upgraded the City’s rating to its pre-COVID-19 level. The outlooks for NYW and bonds issued on behalf of NYW by EFC have remained stable throughout. Despite any rating actions due to COVID-19, the entities financing the City’s capital program have maintained reliable market access to finance capital spending and undertake refinancing transactions, as discussed later.
Ratings
| Issuer | Moody's | Standards and Poor's | Fitch | Kroll |
|---|---|---|---|---|
| NYC GO | Aa2 | AA | AA- | AA+ |
| TFA Senior | Aaa | AAA | AAA | |
| TFA Subordinate | Aa1 | AAA | AAA | |
| TFA BARBs | Aa3 | AA | AA | |
| NYW First Resolution | Aa1 | AAA | AA+ | |
| NYW Second Resolution | Aa1 | AA+ | AA+ | |
| EFC Senior SRF Bonds | Aaa | AAA | AAA | |
| EFC Subordinated SRF Bonds | Aaa | AAA | AAA |