News
New York City Transitional Finance Authority Announces Successful Sale of $1.8 Billion Future Tax Secured Subordinate Bonds
The New York City Transitional Finance Authority (“TFA”) announced the successful sale of $1.8 billion of future tax secured subordinate bonds, comprised of $1.5 billion of tax-exempt fixed rate bonds and $300 million of taxable fixed rate bonds. Proceeds from the sale will be used to fund capital projects.
TFA received nearly $432 million of orders during the retail order period and over $3.4 billion of priority orders during the institutional order period, which in total represents approximately 2.6x the tax-exempt bonds offered for sale.
Due to investor demand for the tax-exempt bonds, yields were reduced relative to the start of the institutional order period by 1 basis point in 2029 and for the 4.125% coupon bonds in 2052; by 2 basis points in 2026; by 3 basis points in 2040 and 2047; by 4 basis points in 2041, 2048, 2049, and 2051; and by 8 basis points for the 5% coupon bonds in 2052.
Final yields ranged from 2.91% to 4.25% for the 4.125% coupon bonds maturing in 2052.
The tax-exempt bonds were underwritten through TFA’s underwriting syndicate led by book-running lead manager RBC Capital Markets, with BofA Securities, J.P. Morgan, Jefferies, Loop Capital Markets, Ramirez & Co., Siebert Williams Shank, and Wells Fargo Securities serving as co-senior managers.
TFA also sold $300 million of taxable fixed rate bonds via competitive bid. The first subseries of approximately $160 million of bonds maturing in 2030 through 2033 attracted 8 bidders, with J.P. Morgan winning at a true interest cost of 4.937%. The second subseries of approximately $140 million of bonds, which mature in 2034 through 2036 and are callable at par in 2034, also attracted 8 bidders with J.P. Morgan winning at a true interest cost of 5.099%.