BAKU, Azerbaijan, October 8. Fitch Ratings assigned an 'AA' rating to $3.42 billion of New York City's general obligation bonds on October 2, 2026, while maintaining a Negative Outlook on the city's credit, according to the agency.
Trend's calculations show that the five bond series covered by the action - $1.5 billion of tax-exempt Series D, $470.58 million of tax-exempt Series E-1, $51.65 million of taxable Series E-2, $24.43 million of taxable Series F, and $1.375 billion of taxable Series G - total approximately $3.422 billion. The Series D, E and F bonds are scheduled to price through negotiation on October 5 and 6, while the Series G bonds are scheduled to price on October 13 and 14.
"The Negative Outlook reflects the potential for sustained weakening of the city's financial resilience and uncertainty around projected expenditure savings and gap-closing solutions exclusive of reserve use," the agency says.
The agency noted that New York City closed its fiscal 2027 budget gap through a combination of recurring and non-recurring revenues without drawing down reserves, while carryforward surpluses are declining despite continued year-on-year revenue growth.
The city has proposed a minimum-reserves balance policy, subject to voter approval in November, which Fitch said it would view positively. Fitch's model places New York City's implied rating at 8.64 on its numerical scale, within the 8.0-to-9.0 range corresponding to an 'AA' rating. The agency assessed the city's financial resilience at 'aa', based on a 'High' revenue control assessment and a 'Midrange' expenditure control assessment. Fitch also noted that the city's current fund balance-to-expenditure ratio of 9.4% was the lowest recorded during the 2021-2025 period.
Fitch assessed New York City's long-term liability burden as 'Weak', citing liabilities equivalent to 154.2% of governmental revenue and 23.5% of personal income. According to Trend's calculations, the first measure is approximately 6.6 times the second, reflecting the different bases used by Fitch to assess the city's long-term liability burden.
On demographics, Fitch cited an estimated population of 8,584,629 in 2025, down from 8,596,825 in 2024. According to Trend's calculations, this represents a year-on-year decline of approximately 0.14%, compared with the negative 0.3% 10-year average annual trend Fitch used in its assessment of the city's population trend.
The agency also noted that New York City's unemployment rate stood at 120.9% of the national rate. According to Trend's calculations, this implies a city unemployment rate of approximately 5.2%, compared with a national rate of 4.3%.
Fitch said factors that could lead to a revision of the outlook to Stable include credible plans for resolving out-year budget gaps through primarily recurring fiscal measures and maintaining reserves at no less than 7.5% of general fund spending. The agency said an upgrade could be supported by an approximate 35% decrease in long-term liabilities and carrying costs, while a downgrade could follow an approximate 40-to-50% sustained increase in such liabilities, assuming other factors remain constant.
