Moody’s Ratings assigns initial A1 to Buffalo Mun. Water Fin. Auth., NY

Moody’s Ratings assigns initial A1 to Buffalo Mun. Water Fin. Auth., NY

Moody’s Assigns A1 Rating to Buffalo’s General Obligation Bonds; Outlook Stable

Moody’s Investors Service has assigned an A1 rating to the City of Buffalo, New York’s General Improvement Refunding Serial Bonds – 2021A, with a stable outlook. The rating reflects the city’s “satisfactory reserves and liquidity position” and indicates financial stability despite challenges posed by the coronavirus pandemic, which impacted fiscal 2020–2021 revenues.

The A1 rating acknowledges Buffalo’s growing tax base, though socio-economic factors remain below average, and its debt burden—largely supported by state aid—is well above average. Enhanced bondholder security is provided through legally mandated bi-annual set-asides of debt service payments from property tax collections. The bonds are classified as general obligation limited tax (GOLT) due to New York State property tax levy restrictions, though the city council retains the ability to override these caps.

Key Rating Drivers: - Stable Outlook: Reserves are expected to remain robust through fiscal 2021, with prudent management of budget gaps. - Upgrade Potential: Continued reserve growth, tax base expansion, or reduced long-term liabilities could prompt an upgrade. - Downgrade Risks: Declining liquidity, tax base contraction, or increased debt burdens may lead to a rating reduction.

The bonds are secured by the city’s full faith and credit, with debt service backed by a pledge to levy ad valorem property taxes, subject to state-imposed tax caps. Proceeds will refund earlier bond series (2011C, 2011D, 2012B) to achieve net present value savings without extending maturities.

Buffalo, New York’s second-largest city, serves as a regional economic hub in western New York. Moody’s applied its US Local Government General Obligation Debt methodology to assess the rating.

This rating action underscores Buffalo’s capacity to meet debt obligations despite structural challenges, offering clarity for investors in its municipal debt market.

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