News
Monthly Public Finance Wrap-Up: March 2018
TFA BARB Sale Draws Record Individual Investor Response
The New York City Transitional Finance Authority (TFA) sold approximately $1.08 billion of new money and refunding Building Aid Revenue Bonds (BARBs) via negotiated and competitive sales on March 14. The two-day order period for individual investors recorded one of the highest order totals across any of the City’s credits – over $845 million from individuals and professionally-managed individual accounts.
The negotiated sale utilized three-year par call dates on some of the bonds to address a specific bond structuring challenge expected to arise in 2021 as a result of the recent federal tax law. This differs from the City’s (and the municipal market’s) standard ten-year par call feature. Though the City does not expect to offer bonds with these shorter call dates in upcoming sales, they were part of a diverse bond issue that attracted investors with varying market perspectives and needs. This resulted in favorable pricing for the City. Jefferies served as book-running senior manager for the bonds. The competitive sale of about $75 million of taxable bonds attracted eight bidders, with Bank of America Merrill Lynch winning the bid. Read the full press release.
$495 Million New York Water Bond Sale
The New York City Municipal Water Finance Authority sold approximately $495 million of new money and refunding revenue bonds via competitive sale on March 8. Jefferies won the bid for the $275 million of new money bonds maturing in 2048, over seven other bidders. Morgan Stanley won the bid for the $220 million of refunding bonds, which ranged in maturity from 2021 to 2040, out of a field of seven bidders.
NYC Bond Fact
The Port Authority of New York and New Jersey was established in 1921 as the first U.S. inter-state authority. The creation of special districts like the Port Authority, with powers to issue bonds and raise and appropriate funds, was modeled on the Port of London Act of 1908 that centralized management of docks and the tidal River Thames.
Looking Ahead
The New York City Municipal Water Finance Authority plans to sell approximately $425 million of refunding bonds via negotiated sale next week. Individual investors will have priority in placing orders for the bonds on Tuesday, April 3. New York City also plans to offer General Obligation bonds in April. Stay tuned for additional details.
As always, we appreciate your interest in New York City bonds.
Carol S. Kostik
Deputy Comptroller for Public Finance