NYC Bonds

City Audited Financial Statements Released

The Comptroller released New York City’s Comprehensive Annual Financial Report (“Annual Report”) for Fiscal Year 2013 on October 31st, fulfilling the City Charter requirement.  The report provides a detailed look at the City’s finances and shows that, for the 33rd consecutive year New York City completed its fiscal year with a General Fund surplus, as determined by Generally Accepted Accounting Principles (“GAAP”).  The web version of the report has been revised to allow for more user friendly navigation, and features bookmarks for links to specific sections and a search functionality as well.  For further details please refer to the press release or you may download the Annual Report.

$1 Billion Transitional Finance Authority Bond Sale

The TFA sold 1.09 billion of future tax secured fixed rate subordinate bonds for City capital purposes.  The sale included $650 million of tax-exempt new money bonds, $350 million of taxable new money bonds, and $90.28 million of taxable new money Qualified School Construction Bonds (“QSCBs”).  This was the final QSCB new money sale under the authority granted by the federal government.

Continuing the trend in recent sales, TFA received strong retail demand from its individual investor base, selling a total of $150 million of the $261 million offered during the two day retail order period.  Strong investor demand made it possible to reduce yields in the final pricing by one to three basis points in ten maturities. Final stated yields on the $650 million of tax-exempt fixed-rate bonds varied by coupon and maturity, ranging from 0.34% in 2015 to 4.62% in 2042. The tax-exempt fixed-rate bonds were sold via negotiated sale by the TFA’s financing syndicate.

The taxable new money and QSCB portions were sold via competitive bids. The TFA received nine bids for the $350 million of taxable new money bonds offered. The winning bid was submitted with a True Interest Cost (TIC) of approximately 3.80 percent for an average life of approximately 11 years.  Nine bids were also received for the $91 million of taxable QSCBs. The winning bid was submitted with a TIC of approximately 4.45 percent for an average life of approximately 18 years. The TFA’s interest expense on the QSCBs will be substantially subsidized by the federal government.

The TFA also intends to price $125 million of tax-exempt new money variable rate demand bonds (“VRDBs”) on Tuesday, November 12, 2013, bringing the total sale to approximately $1.216 billion.

Standard & Poor’s and Fitch each rate TFA Future Tax Secured Subordinate Lien Bonds at AAA; Moody’s Investor Services rates these bonds at Aa1.

Looking Ahead     

We expect the New York City Municipal Water Finance Authority will offer Water and Sewer System Second General Resolution Revenue Bonds the week of November 11.  Details on the transaction will be announced closer to the sale date.

Information on how to buy New York City bonds is available on the Comptroller’s website.  You can subscribe on our website 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