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Rating Action: Moody's assigns Aa3 enhanced to DASNY's (NY) Master BOCES Program Lease Refunding Rev. Bonds (St. Lawrence-Lewis Issue) Series 2021Global Credit Research - 23 Apr 2021New York, April 23, 2021 -- Moody's Investors Service has assigned a Aa3 enhanced rating to the Dormitory Authority of the State of New York's (DASNY) Master BOCES Program Lease Refunding Revenue Bonds (St. Lawrence-Lewis Issue), Series 2021. The bonds have an expected par value of $3,285,000.RATINGS RATIONALEThe Aa3 rating assignment for the financing is on par with the Aa3 rating on the DASNY Master BOCES Intercept Program and reflects the direct payment of state BOCES (Board of Cooperative Educational Services) aid, strong debt service coverage of maximum annual debt service by interceptable state aid, and a satisfactory schedule of state aid distribution relative to debt service.Combined maximum annual debt service coverage for the 2021, 2020B, 2020A, and 2015 bonds is projected at approximately 2.88x by fiscal 2020 interceptable state aid revenues. Budgeted interceptable revenues in fiscal 2021 are projected to provide 2.87 coverage. Though the 2021 bonds are subordinate to the prior issuances, the strength of the total debt service coverage obviates the need for a rating distinction between the bonds.SLL BOCES will fund a debt service reserve equal to 50% of maximum annual debt service on the Series 2021 issue with cash or a surety bond. After the current sale, final maturity on the SLL's BOCES obligations will be in 2050 with a maximum annual debt service on all outstanding bonds of $3.8 million in 2025.State aid is normally paid to SLL BOCES by the State on or about February 1, June 1 and September 1 of each year though this timing can vary at the discretion of the state. SLL BOCES anticipates that the September disbursement of state aid will be sufficient to pay the lease payments due the following February 15 and August 15. In the event that state aid is insufficient to make the lease payments, SLL BOCES would be required to pay the necessary funds by January 15, in advance of the February 15 payment and July 15 in advance of the August 15 payment.Bondholders benefit from sound mechanics to produce timely remittance of funds to pay debt service. As the conduit issuer, DASNY will annually certify to the Commissioner of Education the total amount payable by SLL BOCES. The Commissioner is required to certify to the State Comptroller the amount of State aid payable to SLL BOCES and the amount to be paid by SLL BOCES to DASNY for the ensuing school year. The State Comptroller is required to deduct the certified amount from any owed to SLL BOCES pay it to or upon the order of DASNY.The Bank of New York Mellon, New York, New York, is the Trustee and Paying Agent.RATING OUTLOOKOutlooks are not assigned to enhanced ratings. The current outlook on the state's intercept rating however is stable, reflecting the stable outlook on the state's rating.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING- Upgrade to the State of New York's Aa2 stable GO rating- Upgrade to the rating on the state's Aa3 stable intercept program ratingFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING- Downgrade to the New York's state GO or intercept program ratings- Material decline in MADS coverageLEGAL SECURITYThe 2021 bonds are special obligations of DASNY that are payable solely from lease payments made by the BOCES district of St. Lawrence and Lewis Counties (SLL). BOCES is required to make lease payments sufficient to cover the principal and interest on the bonds plus any rental fees and expenses. The lease payments are derived from the intercept of state aid that would otherwise flow from the state Comptroller to BOCES component districts but instead are made as lease payments to DASNY via a trustee.USE OF PROCEEDSProceeds of the sale will be used to refund the Authority's outstanding Master BOCES Lease Revenue Bonds (St. Lawrence-Lewis Issue), Series 2011.PROFILEThe SLL BOCES was established in the early 1950s and provides shared services to 18 school districts in St. Lawrence and Lewis Counties, New York that together have approximately 15,000 students. The SLL BOCES shared services are intended to enhance local district educational programs and to provide educational programs to component school districts which individual school districts could not themselves provide efficiently or economically. Funding of SLL BOCES comes from the member school districts. Each pays a proportional share of SLL BOCES administrative expenses (based on either attendance or enrollment formulas) through tax levies, and local school boards vote on its administrative budget each spring. The portion of the budget allocated to payments to DASNY, however, is not subject to such vote of the local school boards.METHODOLOGYThe principal methodology used in this rating was State Aid Intercept Programs and Financings published in December 2017 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1067422. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. 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