Fitch Ratings revised its outlook on New York's Metropolitan Transportation Authority's revenue bonds and dedicated tax-fund bonds to negative from stable last week.

The outlook changes reflect "the greater than expected financial stress the MTA is facing due to a combination of adverse events as well as a limited number of available solutions to satisfy its obligations in the near term," the rating agency said in a press release.

Fitch rates the transportation revenue bonds A and the dedicated tax fund bonds A-plus.

The MTA has a track record of closing projected large operating deficits but economic pressures could reduce state subsidies and worsen already narrow operating margins, Fitch said.

"Without additional resources from the state, which are less likely now, the MTA will need to address funding gaps on its own through a combination of fare and toll increases beyond those already planned, larger service cuts and/or a significant change in the capital plan, more than 64% of which is for state of good repair," Fitch said.

"To the extent that pressure on the MTA's revenue streams continues and the MTA begins to defer essential maintenance, the rating could be pressured."

The MTA plans to market $350 million of transportation revenue bonds on Jan. 6. JPMorgan will lead manage the deal and Nixon Peabody LLP is bond counsel.

Fitch's action follows an outlook change by Moody's Investors Service a week earlier. Moody's rates the MTA's revenue bonds A2 with negative outlook. Standard & Poor's rates the bonds A with stable outlook.

The authority has $29.29 billion of debt outstanding.

The MTA board approved large service cuts in its $11.98 billion 2010 budget to address increased labor costs next year and a nearly $400 million gap that opened up this month when the state cut funding and expected revenue fell short.

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