NYC Bonds

Comptroller’s Work Continues While New York on PAUSE

Comptroller Stringer instructed employees to work remotely effective March 13 to slow the spread of COVID-19, ahead of the PAUSE order that went into effect on March 22. Like many people in New York, Comptroller’s Office employees are working from home as they carry out the important functions of the office. The decision by Comptroller Stringer relied on the office’s solid, up-to-date business continuity plan to quickly transition to new working conditions and nimbly adapt to changing circumstances.

New York Water Shows Leadership in Challenging Market

The New York City Municipal Water Finance Authority (NYW), with the New York State Environmental Facilities Corporation (EFC), sold $171 million of State Clean Water and Drinking Water Revolving Funds Revenue Bonds on March 27. Navigating a tumultuous market, NYW and EFC successfully priced the transaction and received orders totaling over 9x the bonds available. The ability to price the transaction in a changing market demonstrates both the sound management of NYW and EFC, and investors’ confidence in the credit.

 Comptroller Releases Tax Revenue Analysis

On March 23 Comptroller Stringer released an analysis of forecasted tax revenue losses for New York City in Fiscal Years 2020 and 2021, amid the ripple effects of the COVID-19 pandemic on the City’s economy. This vital forecasting puts the City in a better position to make informed decisions going forward. Read the press release.

General Obligation Bond Sale

The City of New York sold $1.36 billion of general obligation bonds on March 4. The combination of tax-exempt and taxable bonds drew strong interest from institutional investors. Subscription levels of over five times the tax-exempt bonds available allowed for yield reductions of 1-7 basis points. Read the press release.

 NYC Bond History – Debt Limit

New York City’s debt is constitutionally limited to ten percent of the assessed value of its real estate. This cap was put in place in 1884 for cities with more than 100,000 residents, but was applied to all municipalities in New York with the constitution of 1894. (The Finances of New York City (1898), by Edward Dana Durand, p.297)

The debt limit is still in place today. As of December 31, 2019, the cap was $116 billion and New York City had $78 billion outstanding, representing 67% of its available borrowing power.

Looking Ahead

The City and its related issuers continue to monitor markets during this time of great uncertainty. Strong federal action appears to be working to stabilize turbulent markets and the City will make informed decisions on future pricings. Regardless of circumstances, the Comptroller’s Office and the Mayor’s Office of Management and Budget will work together to ensure that the City’s financing program will provide adequate capital funding.

Thank you to all the health care workers, first responders, and people working each day to provide food and other essential services throughout the City.

Marj Henning
Deputy Comptroller for Public Finance