NYC Bonds

To our investor community,

As we approach the end of calendar year 2011, the City of New York has been busy wrapping up the last few bond transactions of the year. The City and its related issuers priced over $1.4 billion of bonds through three bond issues during the month of November, including the annual Tax Lien Collateralized Bond sale.

With the European sovereign debt crisis and the recent downgrades of some of our variable rate bond credit and liquidity facility banks, the City of New York continues to closely monitor its counterparty risks. The Comptroller’s Public Finance Investor Relations website contains details on all our bank credit and liquidity facilities and swap counterparties.

The New York City Comptroller’s Office vigilantly monitors the fiscal health of the City on an ongoing basis and publishes reports such as the Quarterly Cash Report, Monthly Cash Letter and Annual Report on Capital Debt and Obligations. These and other reports are detailed below.

Public Financing

The New York City Transitional Finance Authority (“TFA”) priced $900 million Future Tax Secured Fiscal 2012 Series D Subordinate Bonds on November 9. The bonds consisted of $600 million tax-exempt subseries, $100 million taxable Qualified School Construction Bonds (“QSCB”) subseries, and $200 million taxable subseries. (Read the Press Release)

On the same day as the TFA bond sale, NYCTL 2011-A Trust priced $69.7 million of Tax Lien Collateralized Bonds, Series 2011-A through a private placement. These taxable bonds are collateralized by and payable solely from the assets of the issuer, which will consist primarily of liens on real property securing unpaid real property taxes, assessments, sewer rents, sewer surcharges, water rents and other charges imposed by the City of New York.

On November 15, the New York City Municipal Water Finance Authority (“NYW”) priced $450 million tax-exempt Water and Sewer System Second General Resolution Revenue Bonds, Fiscal 2012 Series BB. NYW successfully sold the tax-exempt bonds during a week when tax-exempt supply was the heaviest of the year at approximately $12.2 billion. (Read the Press Release)

Our swap management team also put in tremendous effort to favorably execute a scheduled termination of a Total Return Swap. The transaction is set to close in mid-December with a net payment to the City. Looking ahead to December, TFA will sell fixed-rate new money Building Aid Revenue Bonds (“BARB”s) during the week of December 5, 2011. The BARBs will consist of both tax-exempt bonds and taxable QSCBs. (Read the Press Release) As a reminder, you can sign up to receive bond sale notification emails on the Comptroller’s Public Finance Investor Relations Website.

Financial Reports

The Office of the NYC Comptroller Bureau of Financial Analysis released the Quarterly Cash Report analyzing the City’s cash position from July through September 2011 and the Monthly Cash Letter containing cash balance projections through May 2012. The Monthly Cash Letter projections begin on November 30, near the expected low-balance point of FY12. Accounting for data gathered as of the close of business on November 25, the City anticipates that this low point will measure $1.2 to $1.6 billion cash on hand. The Quarterly Cash Report and Monthly Cash Letter can be downloaded by clicking on the links above.

The Comptroller’s Bureau of Budget has also released the Annual Report on Capital Debt and Obligations. New York City and its related issuers sell bonds to finance projects in the City’s Capital Plan and to refinance outstanding bonds for savings. The Annual Report on Capital Debt and Obligations assesses the debt condition of the City in accordance with the City Charter. The Charter also requires the Comptroller to report the amount of debt the City may incur for capital projects during the current fiscal year and each of the three succeeding fiscal years. The Annual Report on Capital Debt and Obligations can be downloaded by clicking on the links above.

The Mayor’s Office of Management and Budget released the November 2011 Financial Plan, Fiscal Years 2012-2015, on November 18, 2011. This latest version of the Financial Plan is available on OMB’s website. Pursuant to the City Charter, the Comptroller’s Budget Bureau will be publishing in December the State of the City’s Economy and Finances for 2011 report, commenting on the November 2011 Financial Plan.

The Comprehensive Annual Financial Report (“Annual Report”) for Fiscal Year 2011, ending June 30, 2011, was published on October 31, 2011. An electronic copy of the Annual Report is available for download on the Bureau of Accountancy’s website.

You can sign up to receive email notifications when key reports such as the State of the City’s Economy and Finances Report, Quarterly Cash Report, Annual Report on Capital Debt and Obligations, and the Comprehensive Annual Financial Report are ready for electronic download by subscribing on the Comptroller’s Public Finance Investor Relations Website.

“Chart of the Month”

From time to time we will include a chart that presents an interesting perspective on New York City’s economy. In light of the current European debt situation, the Comptroller’s Chief Economist plotted New York City’s debt compared to GDP against the debt and GDP of some of the nations mentioned in recent headlines. Although, national governments have different responsibilities and powers than municipal governments, the chart to the right helps to visualize the scale of current European debt levels.

We hope you had a chance to explore the resources available through our investor relations website. We welcome your feedback on how we can make it better and more useful for our investors. Please sign up for updates to keep informed about the latest developments. Thank you for your interest in New York City Bonds.

Have a wonderful and happy holiday season,

Carol Kostik
Deputy Comptroller for Public Finance