News
Public Finance Wrap-Up: February 2021
Financings in February
New York City Municipal Water Finance Authority (“NYW”)
NYW offered $553 million of new money and refunding bonds in February. The new money bonds included $150 million of bonds sold as “refundable principal installments” maturing in 2027 and 2028, which were priced at an all-in true interest cost of 1.61%. Following a one-day retail order period, the bonds were offered to institutional investors on February 23, receiving over $622 million in orders. Despite a weakening market, investor demand allowed for a $25 million upsizing of the 30-year new money term bond. The $157.3 million refunding portion of the transaction resulted in $69.9 million present value savings or 33.4% of the refunded bonds. Barclays served as book-running lead manager on the transaction.
New York City Transitional Finance Authority (“TFA”)
The TFA successfully sold approximately $1.3 billion of future tax secured subordinate bonds, comprised of nearly $1.0 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 and to pay the purchase price of certain floating rate debt converted to fixed rate debt. During the retail order period for the tax-exempt bonds, TFA received $274 million of orders, out of which approximately $238 million was usable. The institutional order period generated approximately $2.3 billion of priority orders, representing 3.0x the bonds offered for sale to institutional investors. Given the strong demand, yields were reduced by 2-5 basis points across various maturities, with final yields ranging from 0.13% for a 5% bond maturing in 2023 to 2.35% for a 2.25% bond maturing in 2051.
The tax-exempt bonds were underwritten through TFA’s underwriting syndicate, led by book-running lead manager Wells Fargo Securities with BofA Securities, Citigroup, Jefferies, J.P. Morgan, Loop Capital Markets, Ramirez & Co., RBC Capital Markets, and Siebert Williams Shank serving as co-senior managers.
TFA also sold $300 million of taxable fixed rate bonds, comprised of two subseries, via competitive bid, with Wells Fargo Securities winning the first subseries, and UBS Financial Services winning the second.
Upcoming Financings
New York City General Obligation Bonds
The City of New York (“the City”) announced the details of its upcoming sale of approximately $1.8 billion of General Obligation bonds, comprised of approximately $1.25 billion of tax-exempt fixed rate bonds, $200 million of taxable fixed rate bonds, $85 million of tax-exempt stepped-coupon bonds, and $260 million of Adjustable Rate Remarketed Securities (“ARRS”). Approximately $1.1 billion of proceeds of the bond sale will be used to fund capital projects and approximately $695 million of bond proceeds will be used to pay the purchase price of existing multimodal bonds converted to other interest rate modes.
Subject to market conditions, pricing for the tax-exempt fixed rate bonds will take place on Wednesday, March 3, 2021, via negotiated sale through an underwriting syndicate led by book-running lead manager BofA Securities, with Citigroup, 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.
Additionally, the City intends to sell $200 million of taxable fixed rate bonds via competitive bid on Wednesday, March 3, 2021 and approximately $85 million of tax-exempt stepped-coupon bonds via negotiated sale through an underwriting syndicate led by Jefferies, on Thursday, March 4, 2021.
Approximately $260 million of ARRS, to be remarketed by Barclays and BofA Securities, are planned for sale during the week of March 22, 2021.
The Preliminary Official Statement and the Preliminary Reoffering Circular for the tax-exempt and taxable fixed rate bonds are available on munios.com. The Preliminary Reoffering Circular for the tax-exempt stepped-coupon bonds is also now available on munios.com. The Reoffering Circular for the ARRS is expected to be available by March 9, 2021.
For the above-mentioned financing and future financings visit our website.
Comptroller’s Budget Briefing
In February, Comptroller Stringer presented a budget briefing, discussing the challenges and opportunities in the Fiscal Year 2022 Preliminary Budget. For more information, including the full presentation, click here.
Financial Plan and Economic Updates
The Comptroller’s Office continues to provide updated economic and fiscal information in our New York by the Numbers – Weekly Economic and Fiscal Outlook. The Comptroller’s Cash Report and Cash Projection report are also excellent resources. To view both visit the Comptroller’s Cash Report page and Cash Projection page.
Marj Henning
Deputy Comptroller for Public Finance