December 3, 2012 / 2:25 PM / 5 years ago

New York's MTA's notes issuance plan credit negative-Moody's

NEW YORK, Dec 3 (Reuters) - Moody's Investors Service said on Monday that a plan by the New York Metropolitan Transportation Authority to add up to $4.8 billion in short-term recovery notes over the next two years is credit negative.

The MTA, which currently has $32 billion of debt outstanding and plans for more capital borrowing over the next few years, said last week it may hike short-term borrowing to help pay for repairs after superstorm Sandy.

"The MTA's recent focus on reducing operating costs has produced significant recurring savings, but additional savings will be challenging because a large portion of its costs are fixed for labor, benefits and debt service," Moody's said.

"Failure to achieve further cost reductions or other savings would make it more difficult to absorb the planned increase in debt," the ratings agency concluded.

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