NYC Bonds

$1.15 Billion General Obligation Bond Sale

New York City sold approximately $1.15 billion of General Obligation bonds via negotiated and competitive sales on February 22. During a two-day order period for individual investors, the City received $217 million of orders. Institutions placed nearly $2 billion of orders the following day, allowing the City to reduce yields on the bonds by up to .08%. Competitive bids for two taxable bond subseries attracted seven bidders. Jefferies served as book-running senior manager for the bonds. This was the City’s first bond sale of 2018. We found investor demand for a greater-than-usual array of coupons, including at various maturities 3%, 3.25%, 3.375%, 4%, 5% and 5.25%. This may reflect diverse investor viewpoints on the current and prospective rate environments. Read the full press release.

The now-demolished old Kosciusko Bridge, which was replaced by a larger span connecting Brooklyn and Queens. The first of two new spans opened in 2017 and the second is scheduled to open in 2020.

Federal Infrastructure Proposals

The White House released its infrastructure proposal on February 12. The plan calls for $200 billion of federal funding across several grant and loan programs, including $50 billion reserved for rural projects. The funding approach relies more on state, local, and especially private investment than has historically been done, and the plan also proposes policy changes to facilitate private investment and expedite permitting. The plan was reportedly met with skepticism by Congress, with some lawmakers reluctant to approve additional spending after the recently-passed tax bill and others criticizing it for being too small. The White House’s proposal did not identify funding sources for the $200 billion, leaving its development into a bill in considerable doubt.

NYC Bond Fact

New York City’s water supply system, operated by the City’s Department of Environmental Protection (DEP), delivers about 95% of the water supply to the City using gravity alone, thanks to favorable geography. DEP’s website has a short, interesting history of the City’s water supply system.  While drinking water was first brought in from outside the City limits in 1842, the current water and sewer system governance and financing structure was established in 1985. Since then, the New York City Municipal Water Finance Authority has financed capital projects of New York City’s water and sewer system through debt issuance and other funds.

Looking Ahead

The New York Municipal Water Finance Authority plans to sell approximately $470 million of new money and refunding bonds via competitive sale the week of March 5^th and approximately $450 million of refunding bonds via negotiated sale the week of April 2. The Transitional Finance Authority plans to offer bonds in March, with additional details to follow.

As always, we appreciate your interest in New York City bonds.

Carol S. Kostik
Deputy Comptroller for Public Finance