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Sunday, 4 November 2012

• New York's MTA has no plan for extra borrowing

There are certain reports which declare that New York's Metropolitan Transporation Authority (MTA)  has revealed market concerns that it has  already strapped finances could be further strained by cleanup costs after the massive Storm Sandy flooded streets, subways all the area of New York.The chief financial officer of the largest U.S. has said that he has no authority to borrow extra money and the Finance Director also added that debt issuance will be proceeded as it has been planned.The Federal Emergency Management Agency (FEMA) has already confirmed that federal funds will cover all emergency public transportation costs till November 9 in New York.Some concerns were also expressed by the New York State Comptroller Thomas DiNapoli. He said that over a longer period, the MTA may have to shift some capital projects in order to do some important repairs to be done.The MTA, which operates New York City's subway ,buses,  trains and various bridges and tunnels, is still calculating the costs from this week's flooding and fierce winds and finding it hard to  estimates of the financial fallout.Another important and leading issuer in America's municipal bond market, the MTA was pushing ahead with more than $1 billion in debt sales next week, including an offering of $259 million of floating-rate notes delayed from this week because trading was interrupted by Sandy.Moody's confirmed an A2 rating on the revenue bonds, with a stable outlook. In a report on the storm impact on municipal issuers, the rating agency said that public transportation systems could be particularly challenged because they suffer a double whammy from lost revenue while inoperable and from the additional costs of the cleanup.Institutional investors said next week's bond sales should go smoothly, with lots of bidders for the MTA bonds."The mini market is flush with cash," said Dan Heckman, senior vice president at U.S. Bank wealth management. "I think demand will be strong. I may be wrong but there may even be a sympathy bid."McCoy added that the MTA would have "no problem" in meeting bond payments due on November 1 and November 15 on some of its nearly $32 billion of outstanding bonds. Foran said he expected no changes because of Sandy in the MTA's capital improvements projects, which are expected to cost $24 billion over five years ending in 2014.
                                                    Concieved by (By Michael Connor) 

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