NYC Bonds

To Our Investor Community:

As we return from the Thanksgiving festivities, I would like to highlight some important City financial reports.  The Mayor released the November update to the 2016-2019 Financial Plan, and the Comptroller released the Quarterly Cash Report and projection and our office’s annual report on City Capital Debt and Obligations. In addition, the Comptroller’s Office released its first-ever Popular Annual Financial Report (PAFR) to complement the Comprehensive Annual Financial report (Annual Report) released in October.

On the debt front, the New York City Municipal Water Finance Authority (NYW) sold $350 million of second resolution new money bonds. While there were no General Obligation bond sales, a reoffering of bonds backed by rental payments from New York City generated updated City disclosure.

Popular Annual Financial Report (PAFR)

The 20-page PAFR was developed to provide important information about the financial activities of the City in a straightforward manner, without the use of accounting jargon. We believe that by making financial information more accessible and transparent, all New Yorkers can better understand New York City’s economy and finances.

The information contained in the PAFR is from multiple sources with the majority coming from the Comptroller’s recently published Comprehensive Annual Financial Report (Annual Report).   Unlike the Annual Report, which contains the City’s government wide financial statements, the five pension systems’ financial information as well as supplemental financial information, the PAFR focuses on the City’s operating units such as City agencies and component units while also covering a broad range of topics, including:

• The effect of a slowdown in national economic growth on New York City’s economy;
• A breakdown of the City’s spending priorities across education, transportation, parks, housing, health, and more;
• Differences between budgeted spending and actual expenditures; and
• The cost of capital projects.

The report also includes interesting facts about capital projects, City spending, taxes and revenues as well as information about property and real estate values. As this is our first PAFR, I welcome any comments or suggestions to share with our Bureau of Accountancy.  The report can be downloaded from our website along with the press release.

November 2015 Financial Plan

As required by State law and the New York City Charter, the Mayor’s Office of Management and Budget (OMB) released a Financial Plan update on November 12th.  New York City prepares a four-year annual financial plan, which is reviewed and revised on a quarterly basis and which includes the City’s capital, revenue and expense projections and outlines proposed gap-closing programs for years with projected budget gaps.  You can download the November Plan from OMB’s website.

Quarterly Cash Report and Forecast

The Comptroller’s Bureau of Fiscal and Budget Studies released its Quarterly Cash Report for the first quarter of FY 2016 (July 1-September 30) and cash balance projection through March  2016. As of November 27, 2015, New York City’s unrestricted cash balance stood at $7.771 billion, exceeding last year’s figure by $2.204 billion. Over the past twelve months, the balance has averaged $9.919 billion, compared to $8.674 billion for the same period last year. The reports provide greater detail on past and projected City cash levels.

Report on City Capital Debt and Obligations

Under the City Charter, the Comptroller is mandated to report annually on the City’s debt. This report, prepared by the Bureau of Fiscal and Budget Studies, profiles the City’s debt and debt limit and analyzes debt affordability and debt burden. In addition to the links in this newsletter, all relevant Comptroller reports are available through the investor information section of the Comptroller’s website.

Updated City Disclosure

A Dormitory Authority for the State of New York (DASNY) bond reoffering required updated information about the City, as the bonds are backed by City rental payments.  The DASNY reoffering circular’s Appendix B, “The City of New York,” contains the same type of information as in the City’s General Obligation bond offerings, and is updated from the last GO bond offering in July to reflect the FY2015 Annual Report and the November financial plan modification. The contents of Appendix B are presented separately under the heading “Annual Financial Information and Operating Data,” filed December 1, 2015 on the New York City page of the MSRB’s EMMA website, and the full DASNY circular is available on EMMA under the CUSIP 64983QJG5.

$350 Million Bond Issuance for the New York City Municipal Water Finance Authority 

In the only bond sale of November, NYW sold $350 million of second general resolution, fixed rate, tax-exempt new money bonds via negotiated sale.  The bonds were offered in two series with yields varying by coupon and maturity, ranging from 1.20% in 2021 to 3.49% in 2046 for the 5 percent coupon.  In the 2021 maturity, NYW sold approximately $22 million of refundable principle installment bonds (RPIs).  This is the first time NYW has sold RPIs since February 2014.

Fitch Ratings rates NYW’s second resolution bonds at AA+; Moody’s Investor Service rates these bonds at Aa1, and Standard & Poor’s rates them at AA+.

Looking Ahead

There are no New York City bond sales scheduled for December and the only scheduled report is the Bureau of Fiscal and Budget charter-mandated review of the Mayor’s November financial plan update.  We expect to send out the December wrap-up early, once the report is issued.

Information on how to buy New York City bonds is available on the Comptroller’s website.  There, you can subscribe to receive sale announcements and other City publications and reports.  The New York State Comptroller also maintains a website with a preliminary forward calendar for major State and City issuers.

As always, we appreciate your interest in New York City bonds.  Please contact us if you have any questions or suggestions as to how we can improve our investor communications.

Carol S. Kostik
Deputy Comptroller for Public Finance