NYC Bonds

To our investor community,

In March, New York City and its related issuers sold $2.1 billion of new money and refunding bonds. The details of these bond sales and upcoming transactions are discussed below.

Public Financings
The New York City Municipal Water Finance Authority (“NYW”) sold $523 million Fiscal 2012 EE fixed-rate bonds on March 7, 2012. (Read the Press Release) The proceeds from the NYW bond sale were used to pay down principal and interest on NYW’s Commercial Paper Notes and refund some high-coupon outstanding bonds. The refunding generated cash flow savings of $110 million over the life of the bonds and net present value savings of $72 million.  These savings will benefit water and sewer ratepayers.

In addition to the fixed-rate bonds, NYW also sold $325 million Fiscal 2012 Subseries B-1 through B-4 variable rate demand bonds (“VRDB”) on March 20, 2012. The Series B bonds are backed by Standby Purchase Agreements (“SBPA”) from U.S. Bank National Association; California Public Employees’ Retirement System; State Street Bank and Trust Company; and The Northern Trust Company. All four subseries of bonds are in the Daily Rate mode and are remarketed by US Bancorp. You can find detailed information on NYC’s Letter of Credit and SBPA Counterparty Exposure on the NYC Comptroller’s Investor Relations website.

New York City also sold $1.2 billion of General Obligation Fiscal 2012 Series G bonds this month to fund City capital projects. $370 million Fiscal 2012 Subseries G-1 tax-exempt and $100 million Subseries G-2 taxable bonds were sold via competitive sales on March 20, 2012. Nine bids were received for both the tax-exempt and taxable bids. (Read the Press Release) $760 million Subseries G-3 through G-7 were issued as VRDBs with credit and/or liquidity support from Citibank, N.A.; PNC Bank, National Association; Mizuho Corporate Bank, Ltd.; and The Bank of Tokyo-Mitsubishi UFJ, Ltd., acting through its New York Branch, Wells Fargo Bank, National Association. The remarketing agents on the Subseries G-3 through G-7 are, respectively, Citigroup; PNC Capital Markets LLC; Wells Fargo Bank, National Association; Goldman, Sachs & Co.; and TD Securities (USA) LLC. All the subseries are in the Daily Rate mode with the exception of Subseries G-3 which is in Weekly Rate mode.

Looking ahead, the New York City Transitional Finance Authority will sell future tax secured subordinate lien tax-exempt bonds and taxable Qualified School Construction bonds during the week of April 9th. (Read the Press Release) You can sign up to receive bond sale notification by emails on the Comptroller’s Public Finance Investor Relations website.

Nugget of Historical Gold

Our office prides itself on having a long term view of New York City finances and borrowing, so we take a keen interest in historical bond materials.  The Bureau of Accountancy is in the process of moving to a new space and our Bureau of Public Finance became temporary custodian of some 150 year-old documents. To the right you can find a scanned page from an 1864 ledger where the County of New York was requesting proposals for $200,000 of “Riot Damages Indemnity Bonds”. The Riot Damages Indemnity Bonds were used to rebuild New York City after the New York City draft riots in July of 1863, during the height of the civil war. Other 19th century sales were for more familiar capital needs such as the Croton water system, schools and parks. However that beautiful penmanship is a thing of the past!

Carol Kostik
Deputy Comptroller for Public Finance