NYC Bonds

To Our Investor Community:

In April the Mayor released his Executive Budget for the coming fiscal year and the New York City Transitional Finance Authority (the “TFA”) sold $750 million of new money Future Tax Secured (FTS) Subordinate Bonds via competitive sale.

Executive Budget for Fiscal 2017 and Financial Plan

On April 26th, the Mayor released his $82.2 billion Executive Budget for FY 2017, which begins on July 1st. He also released the Financial Plan for fiscal years 2016 – 2020. The Executive Budget and Financial Plan are available on the City’s Office of Management and Budget website. The City Council begins hearings on the budget as the process moves to a June adoption. The City Charter mandates that the Comptroller review and comment on the proposed budget.  Our review is currently underway and the Comptroller will testify before the City Council and release the office’s analysis in the coming weeks. 

$750 million Transitional Finance Authority

The TFA’s $750 million new money bond issue was sold via competitive sale.   The sale was divided into three tranches. Subseries F-1 consisted of $198.465 million taxable new money bonds ranging in maturity from 2018 to 2026. Nine bids were received with Citigroup providing the winning bid with the lowest true interest cost (TIC) of 2.295%.   Subseries F-2 consisted of $51.535 million of taxable new money bonds maturating in 2027 and 2028; ten bids were received and the bid was also won by Citigroup with a TIC of 2.942%.  Subseries F-3, the largest of the tranches, consisted of $500 million tax-exempt new money bonds maturing from 2029 to 2042.  Nine bids were received; Bank of America Merrill Lynch providing the winning bid with a TIC at 3.179%.  This transaction marks the first time the TFA has sold bonds via competitive bid since fiscal 2013. 

The TFA subordinate lien FTS bonds are rated AAA/AAA/Aa1 by Standard & Poor’s, Fitch Ratings and Moody’s Investors Service  respectively. 

Looking Ahead

The City is expecting to offer $800 million of tax-exempt General Obligation refunding bonds during the month of May, with an order period for individual investors on May 16 and 17 and final pricing May 18. Information on how to buy New York City bonds is available on the Comptroller’s website.  There, you can subscribe to receive sale announcements and other City publications and reports.  The New York State Comptroller also maintains a website with a preliminary forward calendar for major State and City issuers.

As always, we appreciate your interest in New York City bonds.  Please contact us if you have any questions or suggestions as to how we can improve our investor communications. 

Carol S. Kostik
Deputy Comptroller for Public Finance