News
Public Finance Wrap-Up: March 2021
Welcome Spring
As we have moved our clocks forward and enjoy the warmer weather, we continue to see businesses, schools and other venues re-open and expand capacity.
City employees who have been working from home will begin to return to the office in May, and we look forward to seeing our colleagues in person, at an appropriate distance and wearing our masks, of course! Happy Spring!
Financings in March
New York City General Obligation Bonds
The City of New York (“the City”) successfully completed the sale of approximately $1.5 billion of General Obligation bonds, comprised of just over $1.26 billion of tax-exempt fixed rate bonds, $200 million of taxable fixed rate bonds, and about $86 million of tax-exempt stepped-coupon bonds.
During the two-day retail order period for the tax-exempt fixed rate bonds, the City received $829 million of orders from retail investors. During the institutional order period, the City received nearly $5.9 billion of priority orders, representing 8.3x the bonds offered for sale to institutional investors. Given the strong investor demand, yields were reduced by 2-10 basis across various maturities, with final yields ranging from 0.29% to 2.83%.
The tax-exempt fixed rate bonds were underwritten through a 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.
The City also sold $200 million of taxable fixed rate bonds, comprised of two subseries, via competitive bid. The first subseries comprised of $108 million, attracted 12 bidders, with Barclays winning; and the second subseries of approximately $92 million, with a par call in 2031, attracted 13 bidders, with BofA Securities winning.
The order period for the tax-exempt stepped-coupon bonds, garnered approximately $504 million of orders. Due to strong investor demand, the final yield for the bonds was decreased by 7 basis points. The tax-exempt stepped-coupon bonds were underwritten through a syndicate led by book-running lead manager, Jefferies, with BofA Securities, Citigroup, J.P. Morgan Securities, Loop Capital Markets, Ramirez & Co., RBC Capital Markets, Siebert Williams Shank, and Wells Fargo Securities serving as co-senior managers.
During the week of March 22nd, the City also sold approximately $260 million of adjustable rate remarketed securities (ARRS), remarketed by Barclays and BofA Securities.
New York City Transitional Finance Authority
The New York City Transitional Finance Authority (“TFA”) successfully completed the sale of approximately $1.2 billion in future tax secured subordinate bonds, comprised of just over $1 billion of tax-exempt fixed rate bonds and about $228 million of taxable fixed rate bonds.
The refunding achieved over $255 million in total debt service savings, with approximately $23 million and $232 million of debt service savings in Fiscal Years 2021 and 2022, respectively. Refunding savings on a present value basis were nearly $247 million or 17.1% of the refunded par amount.
During the retail order period for the tax-exempt bonds, TFA received $593 million of orders from retail investors, with the institutional order period garnering approximately $2.1 billion of priority orders, representing 4.7x the bonds offered for sale to institutional investors. Given the strong demand, yields were reduced by 1 to 7 basis points across various maturities with final yields ranging from 0.10% to 2.02%.
The tax-exempt bonds were underwritten through TFA’s underwriting syndicate led by book-running lead manager Ramirez & Co., with BofA Securities, and Citigroup serving as co-senior managers.
The TFA also sold $228 million of taxable fixed rate bonds in two competitive bids. The first bid of approximately $159 million attracted 11 bidders, with J.P. Morgan Securities winning, while the second bid for about $69 million of bonds attracted 13 bidders, and was won by BNY Mellon Capital Markets.
New York City Municipal Water Finance Authority (“NYW”)
NYW successfully completed the sale of $575 million of refunding bonds. During a one-day retail order period NYW received a record $991.8 million of retail orders. The retail order period was the largest among New York City and its related issuers in recent history, surpassing the previous NYC General Obligation record of $974 million from December 2017. The bonds were also offered to institutional investors. NYW received a total of $3.9 billion of retail and priority orders by the end of the order period, representing 6.7x the bonds offered for sale. Building on the strong demand, yields were lowered by up to 17 basis points from the start of the retail order period through final pricing. The refunding resulted in $185.1 million of present value savings or 25.8% of the refunded bonds. Loop Capital Markets served as book-running lead manager on the transaction.
In addition, NYW issued the 2021EE bonds as Second General Resolution Variable Rate Demand Bonds (“VRDBs”). Proceeds from the sale will be used to refund certain First Resolution VRDBs. US Bank and State Street were liquidity providers for the original VRDBs and they will also be liquidity providers for the refunding VRDBs.
Upcoming Financings
There are currently no planned financings for April; information on upcoming financings will be announced via our website.
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
Also known as the Mount Morris Fire Watchtower, the Harlem Fire Watchtower is the last of eleven cast iron watchtowers in New York City. Going back to the 1850’s, New York City once maintained eleven watchtowers used by volunteers as a lookout perch for fires - these volunteers would then ring the large bells to communicate with firefighters and responders. The other ten towers were deteriorated by weather, lack of maintenance and eventually taken down by City due to their unrepairable state and their obsoleteness due to technological advances (like the red alert stations we now see on many corners throughout the city). Until 1913, the Watchtower’s Bell continued to be rung on Sundays for churchgoing purposes, but eventually fell out of use and remained unkempt for decades.
Despite various attempts to have it removed, Harlem residents, proud of its beautiful park, park, fought to keep its Fire Watchtower in place. They formed the Marcus Garvey Park Alliance which works to not only improve the grounds of the park and bring services to the community, but also to preserve many of the spaces that went unused and inaccessible for decades.
In 2015, with help from various government officials, grants and support from the Central Park Conservancy, the Alliance led a full restoration of the tower, which was completed in 2019. This included salvaging as much of the original tower as possible, but also making exact replicas and restoring of the bronze bell. While many of the original components were retained, the bell was in too much disarray and was replaced by a new 5,000 cast iron bell replica of the original.
The surrounding area of the tower is now a sightline, picnic area and entertainment area for Mount Morris park residents. The Park is home to the Harlem Little League Baseball Field, the Richard Rodgers Amphitheater and one of the largest public pools in Manhattan.