NYC Bonds

The City Of New York Announces Successful Sale Of $1.3 Billion Of General Obligation Bonds

On August 19, the City of New York (“the City”) announced the successful sale of approximately $1.3 billion of General Obligation bonds, comprised of just over $1.0 billion of tax-exempt fixed rate bonds and $250 million of taxable fixed rate bonds. Proceeds from the sale will be used to fund capital projects and pay the purchase price of floating rate debt converted to fixed rates.

During the two-day retail order period for the tax-exempt fixed rate bonds, the City received approximately $310 million of orders from retail investors, of which about $180 million was usable.

During the institutional order period, the City received nearly $1.5 billion of priority orders, representing 1.7x the bonds offered for sale to institutional investors. Given investor demand, yields were reduced by 1 basis point for the 4% bonds maturing in 2034 through 2038 and increased 1 basis point for the 5% maturity in 2033. Final yields ranged from 0.10% in 2023 to 2.32% for the 3% bonds maturing in 2050. The tax-exempt fixed rate bonds were underwritten through a syndicate led by book-running lead manager Citigroup, with BofA Securities, J.P. Morgan Securities, Jefferies, Loop Capital Markets, Ramirez & Co., RBC Capital Markets, Siebert Williams Shank, and Wells Fargo Securities serving as co-senior managers. The City also sold $250 million of taxable fixed rate bonds via competitive bid. The bid attracted 10 bidders, with J.P. Morgan Securities winning at a true interest cost of 1.481%.

New York City Transitional Finance Authority Announces Successful Sale of $1.1 Billion of Future Tax Secured Subordinate Bonds

On August 6, the New York City Transitional Finance Authority (“TFA”) announced the successful sale of approximately $1.1 billion of future tax secured subordinate bonds, comprised of roughly $932 million of tax-exempt fixed rate bonds and just over $119 million of taxable fixed rate bonds. Proceeds from the sale will be used to refund certain outstanding bonds for savings. The refunding achieves over $248 million in total debt service savings, with approximately $27 million of debt service savings in Fiscal Year 2022 and $92 million of debt service savings in each of Fiscal Years 2023, 2024, and 2025. Refunding savings on a present value basis are nearly $241 million or 18.6% of the refunded par amount.

During the retail order period for the tax-exempt bonds, TFA received just under $409 million of orders from retail investors, of which about $403 million was usable. The institutional order period garnered over $1.0 billion of priority orders, representing around 2.0x the bonds offered for sale to institutional investors.

Given the strong demand, yields were reduced by 1 basis point for maturities in 2023, 2025, 2026, and 2033. Final yields ranged from 0.08% in 2022 to 1.73% for the 3% bond maturing in 2038.

The tax-exempt bonds were underwritten through TFA’s underwriting syndicate led by book-running lead manager Siebert Williams Shank & Co, with Jefferies, and Loop Capital Markets serving as co-senior managers.

TFA also sold approximately $119 million of taxable fixed rate bonds via competitive bid. The bid attracted 12 bidders, with Jefferies winning at a true interest cost of 0.629%.

New York by the Numbers

The Comptroller’s Office continues to track key economic indicators in its New York by the Numbers – Weekly Economic and Fiscal Outlook, which is currently released on a monthly basis. Notably, New York City subway ridership is increasing and unemployment claims continue to decrease.

Looking Ahead

The New York City Transitional Finance Authority (“TFA”) is pricing $1.2 billion future tax secured subordinate bonds, comprised of $950 million of tax-exempt fixed rate bonds and $250 million of taxable fixed rate bonds, on Wednesday, September 1. Proceeds from the sale will be used to fund capital projects.  Book-running lead manager RBC Capital Markets is leading the negotiated sale of the tax-exempt bonds with the rest of TFA’s underwriting syndicate, including BofA Securities, Citigroup, Jefferies, J.P. Morgan, Loop Capital Markets, Ramirez & Co., Siebert Williams Shank, and Wells Fargo Securities serving as co-senior managers.

The New York City Municipal Water Finance Authority (“NYW”) announced the details of its upcoming sale of approximately $630 million tax-exempt, fixed rate bonds. Proceeds from the bond sale will be used to fund improvements to the System and refund certain outstanding bonds for savings. Individual investors will have priority in placing orders during a one-day retail order period on Monday, September 13, 2021. Subject to market conditions, institutional pricing for the bonds will take place on Tuesday, September 14, 2021. The bonds will be sold via negotiated sale through an underwriting syndicate led by book-running lead manager Raymond James, with Barclays, BofA Securities, Goldman Sachs, Loop Capital Markets, UBS, and Siebert Williams Shank as co-senior managers on the transaction. The Preliminary Official Statement is expected to be available on www.munios.com and www.nyc.gov/nyw on September 2, 2021.

Marj Henning
Deputy Comptroller for Public Finance