Rating agency Fitch yesterday downgraded New York City debt to ‘AA-’ from ‘AA’, while maintaining its negative outlook, on concerns of a prolonged impact to the city’s economic growth due to the coronavirus crisis and related containment measures, Reuters reported. Fitch’s move comes close on the heels of S&P Global Ratings changing its outlook on the city’s debt to “negative” from “stable” due to uncertainties stemming from a recent uptick in the virus transmission rate. S&P’s revision relates to the city’s general obligation (GO) and associated appropriation-backed bonds, while the Fitch downgrade includes industrial development revenue (IDR) bonds, special revenue bonds and GOs. It reflects a one-in-three chance S&P could lower its rating during the outlook period, which typically spans two years, the rating agency said. The coronavirus transmission rate increase could hurt the city’s financial forecast, and could negatively affect global tourism trends and additional federal stimulus funding for state and local governments as well as service reductions at the Metropolitan Transportation Authority, S&P Global Ratings credit analyst Nora Wittstruck said in a statement.
