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Monthly Public Finance Wrap-Up: April 2017

May 11, 2017

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 (“TFA”) sold $1.14 billion of Future Tax Secured (FTS) Subordinate Bonds to fund city capital projects.

Executive Budget for Fiscal 2018 and 2017-2021 Financial Plan

On April 26th, the Mayor released his $85.5 billion Executive Budget for FY 2018, which begins on July 1st. He also released the Financial Plan for fiscal years 2017 – 2021. 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 towards 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.

$1.14 Billion Transitional Finance Authority Bond Sale

The TFA sold $1.14 billion of bonds, comprised of $839 million of tax-exempt fixed rate bonds and $300 million of taxable fixed rate bonds. The sale was divided into three tranches. Subseries E-1 was sold via negotiated sale, led by book-running senior manager RBC Capital Markets, and consisted of $800 million of tax-exempt new money bonds ranging in maturity from 2019 to 2045 and $39 million of reoffered bonds.

The $300 million of taxable fixed rate bonds were sold via competitive bid. Subseries E-2 consisted of $234.21 million of taxable new money bonds ranging in maturity from 2019 to 2027. Eight bids were received for subseries E-2, with RBC Capital Markets winning at a true interest cost of 2.844%. Subseries E-3 consisted of $65.79 million of taxable new money bonds maturing in 2028 and 2029. Ten bids were received for subseries E-3, with FTN Financial Capital Markets winning at a true interest cost of 3.432%.

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

Federal Tax Reform

The Comptroller’s Office is monitoring the possibility of changes to federal tax policy. The release of a one-page federal tax reform proposal by the Secretary of the Treasury on April 26 offered limited information to analyze. When details become available, the office will be better equipped to examine potential effects on New York City, were tax changes to occur. Our office released a statement on the April 26th tax proposal.

Welcome to New Public Finance Staff

Christian Hansen has joined the Public Finance Bureau as Debt Analyst and Administrator. In this role, he will support our service to New York City’s investors, including helping with investor inquiries. You can reach Christian at 212-669-4543 or chansen@comptroller.nyc.gov.

Looking Ahead

The Hudson Yards Infrastructure Corporation is expecting to offer approximately $2.2 billion of tax-exempt refunding bonds during the month of May, with an order period for individual investors on May 19 and 22 and final pricing May 23. Additional information and the Preliminary Official Statement are available here.

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

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