KBRA assigns a long-term rating of AAA with a Stable outlook to the Dormitory Authority of the State of New York (DASNY) State Sales Tax Revenue Bonds, Series 2024A (Tax-Exempt).

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

• Provisions of the Enabling Act and the importance of sales tax revenues to state operations mitigates the risk of legislative non-appropriation of financing agreement payments or a failure to pay such payments when due after amounts have been appropriated and set aside in the Sales Tax Revenue Bond Tax Fund (STRBTF).
• STRBTF Receipts provide ample historical and projected coverage of maximum annual debt service.
• Overleveraging of the revenue stream is unlikely given the strong 2.0x additional bonds test, as well as the State’s reliance on excess sales tax revenues for operations.
• The potential for a diversion in the flow of STRBTF Receipts in the event of a budgetary delay or a severe fiscal distress, while not non-existent, is extremely remote, in KBRA’s view.

Credit Challenges

• Financing agreement payments are subject to annual appropriation and executory only to the extent of amounts available in the STRBTF.
• Sales tax receipts are inherently sensitive to cyclical economic conditions, demographics, inflation, financial market volatility, and exogenous events such as recessions and pandemics.

Rating Sensitivities

For Upgrade

• Not Applicable

For Downgrade

• A trend of declining debt service coverage that approaches the 2.0x ABT level.
• A failure by the State legislature to annually appropriate amounts required to make financing agreement payments.
• Action by the State to amend, repeal or alter statutes relating to the State Sales Tax or the State Sales Tax Revenue Bond Financing Program that negatively impact revenues available for financing agreement payments.

To access rating and relevant documents, click here.

Methodologies

• Public Finance: U.S. Special Tax Revenue Bond Rating Methodology
• Public Finance: U.S. State Annual Appropriation Obligation Rating Methodology
• ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

Doc ID: 1005019

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