Moody's Affirms P-1 Short-Term Ratings for Nuveen New York AMT-Free Quality Municipal Income Fund

Strategic Insights -

Moody's Investors Service has affirmed the P-1 short-term ratings for Series 1 and Series 2 Variable Rate Demand Preferred (VRDP) Shares issued by Nuveen New York AMT-Free Quality Municipal Income Fund, citing changes in the liquidity providers for the fund's VRDP shares. The affirmations follow the appointment of new liquidity providers, Societe Generale and Royal Bank of Canada, effective on December 3, 2020. The ratings reflect the unconditional liquidity support provided by the new liquidity providers, which is substantially identical to the purchase obligation previously provided by Citibank.

Key Takeaways:

  • Moody's has affirmed the P-1 short-term ratings for Series 1 and Series 2 VRDP Shares issued by Nuveen New York AMT-Free Quality Municipal Income Fund.
  • The affirmations follow changes in the liquidity providers for the fund's VRDP shares, with Societe Generale and Royal Bank of Canada appointed as new liquidity providers, effective on December 3, 2020.
  • The ratings reflect the unconditional liquidity support provided by the new liquidity providers, which is substantially identical to the purchase obligation previously provided by Citibank.
  • The short-term ratings of securities such as VRDP shares with unconditional liquidity support provided by a bank are based solely on the Liquidity Provider's short-term rating and its creditworthiness.
  • Moody's has taken no concurrent action on the long-term ratings of the Series 1 or Series 2 VRDP shares or on the long or short-term ratings of any other series of preferred shares issued by NRK.
  • The principal methodology used in these ratings was "Securities Issued by US Closed-End Funds" published in August 2018.

Statistics:

  • Series 1 VRDP Shares: $112,300,000 with 1,123 shares and liquidation preference of $100,000 per share
  • Series 2 VRDP Shares: $164,800,000 with 1,648 shares and liquidation preference of $100,000 per share
  • December 3, 2020: Effective date of the change in liquidity providers for the fund's VRDP shares
  • Moody's short-term counterparty risk assessment for Societe Generale: P-1(cr)
  • Moody's short-term counterparty risk assessment for Royal Bank of Canada: P-1(cr)

Sources:

  • Moody's Investors Service press release
  • "Securities Issued by US Closed-End Funds" methodology published in August 2018
  • Moody's Rating Symbols and Definitions
  • Regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices.