News
New York City Transitional Finance Authority Announces Successful Sale of $1.2 Billion Future in Tax Secured Subordinate Bonds
Debt Service Savings Totaling Over $255 Million in Fiscal Years 2021 and 2022
The New York City Transitional Finance Authority (“TFA”) announced the successful sale of approximately $1.2 billion in future tax secured subordinate bonds, comprised of just over $1.0 billion of tax-exempt fixed rate bonds and about $228 million of taxable fixed rate bonds.
The refunding achieves over $255 million in total debt service savings, with approximately $23 million and $232 million of debt service savings in Fiscal Years 2021 and 2022, respectively. Refunding savings on a present value basis are nearly $247 million or 17.1% of the refunded par amount.
During the retail order period for the tax-exempt bonds, TFA received $593 million of orders from retail investors, of which $564 million was usable. The institutional order period garnered approximately $2.1 billion of priority orders, representing 4.7x the bonds offered for sale to institutional investors.
Given the strong demand, yields were reduced by 2-3 basis points for maturities in 2023 through 2027, and 1-7 basis points for maturities 2030 through 2037. Final yields ranged from 0.10% in 2021 to 2.02% for the 4% bond maturing in 2038.
The tax-exempt bonds were underwritten through TFA’s underwriting syndicate led by book-running lead manager Ramirez & Co., with BofA Securities, and Citigroup serving as co-senior managers.
The TFA also sold $228 million of taxable fixed rate bonds in two competitive bids. The first bid of approximately $159 million of bonds maturing 2022 through 2026 attracted 11 bidders, with J.P. Morgan Securities winning at a true interest cost of 0.508%. The second bid for about $69 million of bonds maturing in 2032 through 2036 attracted 13 bidders, with BNY Mellon Capital Markets winning at a true interest cost of 2.546%.