State of New York

The transit authority, reeling from the effects of the coronavirus, takes another hit from Wall Street.

New York State’s first credit downgrade in 17 years is a warning that fiscal changes will be necessary to combat its coronavirus-induced budget crisis, according to observers.

Bond analysts and budget watchdogs say the move underscores the need for the de Blasio administration to look within for efficiencies, even if it receives more federal or state help.

The rating agency lowered GO and other credits, citing the effects of the coronavirus.

The move by New York's mayor could precede more citywide action in the absence of federal rescue aid or state-authorized long-term borrowing.

New York's law permitting municipalities to extend rollover periods on bond anticipation notes provides budget flexibility, but it's unclear how it will impact long-term debt.

Municipal bond volume kept rolling in August, producing the second-highest volume for the month in the past decade, marking the third consecutive month this year of greater-than $40 billion.

The mass transit agency, its finances reeling from the coronavirus, rejected bids from 10 different banks and sold $451 million of notes to the Municipal Liquidity Facility.

New York State’s revenue deficit deepened during the first three months of fiscal 2021, underlining how crucial federal funding is to help, according to Gov. Andrew Cuomo.

The move will enhance economic recovery from the coronavirus, the rating agency said.