Edward M. Kresky, banker created NYC debt plan, 88

When Mr. Kresky resigned, the authority had sold more than $4 billion in bonds.
John Sotomayor/N.Y. Times/1982
When Mr. Kresky resigned, the authority had sold more than $4 billion in bonds.

NEW YORK — Edward M. Kresky, 88, an investment banker who was an architect of the debt refinancing plan that saved New York City from bankruptcy in the 1970s, died Jan. 23 at his home in New York.

The cause was heart disease.

Mr. Kresky, a former aide to Governor Nelson A. Rockefeller, was among the first appointments made in 1975 to the new Municipal Assistance Corp., a money-borrowing state authority cobbled together that spring by the Legislature and Governor Hugh L. Carey to calm a spreading, and mostly justified panic in the financial markets about the city’s solvency.


The corporation, which would soon be called ‘‘Big Mac,’’ was authorized to borrow billions of dollars to pay the city’s short-term debts, keep services going, and restructure the financial burden the city had accumulated over decades. In hope of quelling panic, the state packed the board with financiers of high standing on Wall Street. Further reassurance came in a novel financing proposal made by Mr. Kresky.

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The plan was to sell bonds on the tax-free municipal bond market. Mr. Kresky, who headed the municipal bond department at his banking firm, Wertheim & Co., became the unofficial ambassador to those most important, and skittish, of Big Mac’s customers.

At Mr. Kresky’s suggestion, the corporation secured its loans, and overcame market fears, with a guarantee considered fairly unusual at the time: Corporation bondholders were promised that city sales tax revenues would be used to pay them first, before any other city expense was addressed.

Eugene J. Keilin, the authority’s executive director in the 1970s and ’80s, said that Mr. Kresky had seen the strategy applied successfully in other municipal crises, though not in one of such magnitude.