NYC Bonds

To Our Investor Community:

The City’s Fiscal Year 2012 ended on June 30th  with over $9.3 billion of bonds sold to fund capital projects and $4.28 billion sold to refinance high-coupon debt to provide budget and ratepayer relief.  The City’s General Obligation (GO), Transitional Finance Authority (TFA) and Municipal Water Finance Authority (NYW) sold an aggregate of 23 bond series totaling $12.6 billion of bonds in FY 2012, with an additional $1 billion sale by the Hudson Yards Infrastructure Corporation (HYIC) to fund completion of the #7 train extension to the far west side of Manhattan.

City issuers took advantage of the low interest rate environment to secure substantial savings from the refinancings.  The gross savings to GO, TFA and NYW totaled $636 million, or over $500 million on a present value basis with future savings discounted back to the sale date.  By executing these refundings, we provided budget-balancing relief to the City’s operating budget and to water and sewer ratepayers.  While some investors may be sorry to lose the high-coupon bonds we are refinancing, these budget savings are important and we continue to actively monitor refinancing opportunities.

May and June Bond Sales

City issuers directly marketed three debt offerings in May and June: a $997 million GO refunding, a $1 billion TFA new money issue backed by the City’s personal income tax, and a $662 million NYW issue that included both new money and refunding bonds.  NYW was also the underlying borrower in two bond sales by the New York State Environmental Facilities Corporation, one each closing in May and June. Details on the GO, TFA and NYW offerings and sale results are available on the Recently Completed Transactions page of the Comptroller’s website.

New York City Budget for FY 2013 and Four Year Financial Plan, 2013-2016

New York City’s $68.5 billion operating budget for the fiscal year beginning July 1 and related Four Year Financial Plan were adopted June 28th and can be accessed through the Office of Management and Budget (OMB) website. Comptroller Liu’s June 6th report on the proposed Executive Budget is available on our website.  The FY 2013 budget is balanced, as required by law.

Pension Reporting Rules

In late June, the Governmental Accounting Standards Board (GASB) announced two new accounting rules for pensions: GASB 67 (Financial Reporting for Pension Plans) and GASB 68 (Accounting and Financial Reporting for Pensions).  These rules will supplement and/or replace prior GASB rules now in effect and will apply to financial statements for periods beginning after June 15, 2014. For New York City, this would be our FY 2015 which begins July 1, 2014.  GASB encourages earlier adoption.

City accounting staff and the City Actuary are currently reviewing the new GASB rules and an implementation timetable will be decided upon when this review is complete. The changes GASB has mandated are significant but the City has not completed the process of evaluating the impact of Statements No. 67 and 68 on its financial statements.

Looking Ahead

The City’s next bond sale will be an $850 million offering of TFA Building Aid Revenue Bonds, to be sold the week of July 9th.  Bonds will be offered to exclusively to retail investors on Tuesday and Wednesday, July 10th and 11th, with the institutional investor sale and final pricing scheduled for July 12th.  More details are available in the Press Release.  Information on how to buy New York City bonds is available on the Comptroller’s website. Future financings are typically announced 1-2 weeks in advance of the sale date and you can subscribe here 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’s 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