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Monthly Public Finance Wrap-Up: June 2017

July 3, 2017

To Our Investor Community:

In June the New York City Transitional Finance Authority sold approximately $1.1 billion of tax-exempt and taxable new money bonds and the New York City Municipal Water Finance Authority competitively bid approximately $162 million of tax-exempt refunding bonds.

$1.1 Billion Transitional Finance Authority Bond Sale

The New York City Transitional Finance Authority (“TFA”) sold $1.1 billion of Future Tax Secured (“FTS”) bonds, comprised of $850 million of tax-exempt fixed rate bonds and $250 million of taxable fixed rate bonds. The proceeds will be used to fund capital projects in New York City.

The tax-exempt bonds were sold via negotiated sale, led by book-running senior manager Loop Capital Markets, and ranged in maturity from 2019 to 2044. Despite a limited number of bonds offered in the early maturities, individual investors accounted for $214 million of the sale. The taxable bonds were sold via two competitive bids, with J.P. Morgan winning both series. The TFA subordinate lien FTS bonds are rated AAA by Standard & Poor’s, AAA by Fitch Ratings and Aa1 by Moody’s Investors Service.

$162 Million New York Water Bond Sale

The New York City Municipal Water Finance Authority (“NYW”) competitively bid $162 million of tax-exempt refunding bonds. Bank of America Merrill Lynch supplied the winning bid with a true interest cost of 3.58% for bonds maturing in 2037 and 2038. The Second Resolution Bonds are rated AA+ by Standard & Poor’s, AA+ by Fitch Ratings and Aa1 by Moody’s Investors Service. The refunding sale will save NYW $60 million in debt service over the life of the bonds.

Federal Infrastructure Proposals

The White House announced an “Infrastructure Week” at the beginning of June, but offered few details or proposals by its end. Project permitting processes and the FAA received the most attention, with a nod toward leveraging private investment. We will continue to monitor federal proposals and discussions.

Looking Ahead

The New York City Transitional Finance Authority plans to sell Building Aid Revenue Bonds the week of July 10, with individual investors having priority on July 11 and 12. The City also expects to offer General Obligation bonds later in July. Additional information is available via the links below.

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

Carol S. Kostik
Deputy Comptroller for Public Finance

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