Thursday, February 04, 2010

New revenue shortfall adds to NYMTA woes

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Wall Street sources said the New York Metropolitan Transportation Authority, which has $12.6 billion of outstanding debt, will find it more costly to borrow new money following the disclosure this week that it faces an unexpected new shortfall in revenue.

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That shortfall came to light when the MTA revised downward, by $350 million, its December estimate for revenue from a special payroll tax that was enacted to prune the agency's deficit.

The news led Moody's Investors Service to downgrade MTA's credit rating by one notch to A3. Moody's said the outlook is "stable."

The MTA delayed a $600 million offering of Build America Bonds planned for Wednesday. The MTA is already planning service and staff cuts.

In its new disclosure, the agency said: "The MTA is considering a variety of cost-saving and other measures in addition to those proposed in the December plan to deal with the anticipated additional revenue shortfalls in its operating budget."