News
December 2013 Monthly Public Finance Wrap-Up
To Our Investor Community:
The Bureau of Public Finance ended the year on a busy note, achieving over $64 million in budgetary savings with a General Obligation (G.O.) bond refinancing.
On December 10, New York City sold $800 million of tax-exempt refunding G.O. bonds, an increase of $100 million from the previously announced $700 million deal size. The refunding achieved budgetary savings of more than $64 million, or more than $53 million on a present-value basis, with future savings discounted back to the sale date. Most of the savings will occur in FY 2014 and 2015.
The City received $186 million of retail orders for the tax-exempt bonds during the two-day retail order period. During institutional pricing, the City received over $1 billion of priority orders. Strong investor demand allowed the City to reduce yields in five maturities by two to four basis points.
The ratings for New York City General Obligation Bonds are Aa2 from Moody’s Investor Service, AA from Standard & Poor’s and AA from Fitch Ratings. Each rating has a “stable” outlook.
The State of the City’s Economy and Finances Report
On December 13, the Comptroller released his City Charter-mandated State of the City’s Economy and Finances report. The report shows that more than 300,000 jobs have been added in New York City since the worst of the recession, with strong growth in the health, technology, and education sectors. The City’s total private-sector employment now stands above its pre-recession peak. The report also identifies areas of concern such as expired municipal labor contracts and the federal budget. You may download the entire report on our website.
2013 – Public Finance Year in Review
In order to fund capital projects, New York City and its related issuers had 10 new-money transactions totaling $6.7 billion in calendar year 2013. Given the low interest rates, the City also sold $5.2 billion in bonds to refund higher coupon bonds and reduce interest expense. The refundings resulted in $616 million of debt-expense savings over the life of the bonds. By executing these refundings, we provided budget-balancing relief to the City’s operating budget and to water and sewer ratepayers.
Looking Ahead
We anticipate both the New York City Transitional Finance Authority and New York City Municipal Water Finance Authority to enter the market during the month of January. Details on size and structure will be announced closer to the transaction date.
Information on how to buy New York City bonds is also available on the Comptroller’s website. You can subscribe on our website 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.
Happy New Year!
Carol S. Kostik
Deputy Comptroller for Public Finance