Ratings Agency Doesn’t Like City/State Grab of Battery Park Funds
Eliot Brown April 13, 2010, 3:32 p.m.
The Bloomberg and Paterson administrations had much to be pleased with late last month when they reached a deal to take $861 million in Battery Park City funds, putting money toward budget gaps and affordable housing.
As for Battery Park City bondholders? They have less to applaud.
Credit ratings giant Moody’s last week put $1 billion in Battery Park City funds bonds “on watch” for a downgrade, sounding the alarm on what it apparently views as a challenge to the agency’s stable financial footing.
Bond Buyer had a story on the issue Monday.
The announcement from Moody’s said that while the money the city and state took was not specifically a reserve fund for the bonds, it was a factor in the bonds’ high ratings:
Moody’s has considered the balance of residual funds that could be used for BPCA purposes if necessary (subject to City agreement) to be a factor in the BPCA’s credit strength and a contributor to the high levels of ratings assigned to the Bonds. Moody’s is placing the Bonds under review for downgrade pending assessment of the impact of the withdrawals on the ratings.