NYC Bonds

Kroll Rates NYC General Obligation Bonds

On July 14, Kroll Bond Rating Agency (“KBRA”) assigned New York City’s General Obligation bonds an AA+ rating with a Stable Outlook. In its report assigning the City its second highest rating, KBRA commented on the City’s diverse economy as a center of business and culture, strong financial management practices and historical resilience towards budgetary stress. KBRA also praised the City’s pension funding ratios, and low debt service that is below 15% of City tax revenues. This positive rating continues the trend set in May when both Moody’s and S&P revised the City’s outlook to stable on its GO bonds.

New York City Transitional Finance Authority Announces Successful Sale of Building Aid Revenue Bonds

In July, the New York City Transitional Finance Authority (“TFA”) announced the successful sale of approximately $813 million of Building Aid Revenue Bonds, comprised of roughly $583 million of tax-exempt fixed rate bonds and just over $230 million of taxable fixed rate bonds. Given strong demand, yields were reduced by 3 basis points in 2022, by 3-4 basis points for certain maturities in 2034 through 2041, by 2 basis points for maturities in 2031 and 2032, and by 1 basis point in 2030. Final yields ranged from 0.10% in 2022 to 1.80% for the 3% bond maturing in 2041. TFA also sold $230 million of taxable fixed rate bonds via competitive bid. The bid attracted 11 bidders, with J. P. Morgan Securities winning at a true interest cost of 1.135%.  This refunding resulted in 26.434134% ($214,913,475.76) in present value savings, and $223,507,743 in total cash flow savings over the life of the debt.

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. Notably, New York City subway ridership and office occupancy are growing, along with apartment rents which began to rise for the first time since the onset of the pandemic.

Looking Ahead

The City will offer approximately $1.3 billion of General Obligation bonds, comprised of approximately $1.04 billion of tax-exempt fixed rate bonds and $250 million of taxable fixed rate bonds. Subject to market conditions, pricing for the tax-exempt fixed rate bonds will take place on Wednesday, August 18, 2021, via negotiated sale through an underwriting 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 & Co., and Wells Fargo Securities serving as co-senior managers. Retail investors will have priority in placing orders for the tax-exempt bonds during a two-day retail order period beginning on Monday, August 16, 2021. Also, on Wednesday, August 18, 2021, the City intends to sell $250 million of taxable fixed rate bonds via competitive bid.

Marj Henning
Deputy Comptroller for Public Finance