NYC Bonds

To Our Investor Community:

After a two and a half year hiatus, the New York City Transitional Finance Authority (TFA) sold $750 million tax-exempt new money Building Aid Revenue Bonds (BARBs).  The proceeds from this bond sale will finance new school construction and capital improvements to existing school buildings in the City of New York.

In addition the Comptroller’s Office Bureau of Fiscal and Budget Studies released a report in which they analyzed the cost associated with ice and snow removal across the five boroughs.

$750 million TFA BARBs sale

The TFA BARBs sale on January 12th-14th received excellent investor support, starting with the individual buyer base. Over $353 million of orders were received from individual investors during the two-day retail order period.  Of the 15 maturities offered, 10 were oversubscribed. This level of demand reflected the high credit quality and relative scarcity of the TFA BARB bonds, which we haven’t sold since 2012, as well as strong overall market conditions.

During the institutional order period, $1.7 billion of priority orders were received for the approximately $579 million of bonds offered to institutions.  Strong investor demand from both individuals and institutions made it possible to reduce yields by up to 7 basis points in 21 maturities during final pricing. Final stated yields on the bonds varied by coupon and maturity, ranging from 0.24% in 2016 to 2.93% in 2043 for a 5% coupon bond and 3.25% in 2044 for a 4% coupon bond. Ramirez & Co. was the book-running senior manager of the transaction.

TFA BARBs are rated AA by both Fitch Ratings and Standard & Poor’s, while Moody’s Investor Service rates them at Aa2.

Cost of Ice and Snow Removal

Just in time for the winter weather, a new report by the Comptroller’s Office Bureau of Fiscal and Budget Studies analyzed the costs associated with removing ice and snow from City streets.  The report found that since the winter of 2003, the average cost of clearing New York City streets of snow and ice is $1.8 million per inch, debunking the old adage of $1 million per inch.

The City budgets annually for snow removal based on the average amount spent over the previous five years.  However, the amount the City spends varies according to snowfall amounts during the winter season.  Annual costs for ice and snow removal range from a low of $25.4 million in FY08 to a high of $130.7 million in FY14 and averaged $55.3 million from FY03-FY14.  For the same period, annual snowfall totals averaged 35.9 inches per year, with a high of 61.5 inches in FY11 and a low of 6.8 inches in FY12.

Looking Ahead

The New York City Municipal Water Finance Authority announced that it is offering fixed rate tax-exempt refunding bonds the week of February 16th.
Information on how to buy New York City bonds is 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.

Carol S. Kostik
Deputy Comptroller for Public Finance