News
Public Finance Wrap-Up: October 2019
New York Water Holds Investor Conference
The New York City Municipal Water Finance Authority held its annual investor conference on October 18 at the Newtown Creek Education Center and Wastewater Resource Recovery Facility in Brooklyn. Participants were treated to informative presentations on the work of the New York City Department of Environmental Protection and enjoyed a tour of the facility, including the digester eggs pictured below.
New York City GO Sale Launches ARRS
New York City sold its inaugural series of $100 million of ARRS, Adjustable Rate Remarketed Securities, on October 21. These variable rate bonds further diversify the City’s debt portfolio and offer bondholders an additional choice when investing in New York City. The City also sold $980 million of general obligation fixed-rate bonds on October 3 via negotiated and competitive sales. Read the press release.
TFA Sells BARBs
The New York City Transitional Finance Authority sold $250 million of Building Aid Revenue Bonds (BARBs) via competitive sale on October 28. The bonds were sold almost exactly a year after the previous BARB sale in October 2018. The bonds were sold in two tranches, with BofA Securities winning both subseries of the bonds. Proceeds from the sale will be used to fund education capital projects. Read the press release.
NYC Bond History – Debt Was Central to Building the Park
Bonds for the construction of Central Park greatly increased New York City’s indebtedness in the 1850s and 1860s. In addition to buying property, the City constructed new water reservoirs in Central Park, which accounted for a large portion of the new debt.
The cost of acquiring the land for Central Park increased from an initial estimate of $1.4 million in 1851 to $5.1 million by 1856. Seeing the site as “very rocky and even”, the City Council committee estimating the cost of land assumed it would be relatively cheap, believing the land was “almost worthless for dwelling or business purposes.” As costs rose, the City Council passed a resolution to limit the park’s northern end to 72nd Street, which was vetoed by the mayor. The City later sold additional bonds to extend the park from 106th Street to 110th Street. At the start of 1869, bonds issued for the construction of Central Park totaled just over $10 million. (The Finances of New York City (1898), by Edward Dana Durand, pp. 97-100)
(“General View of N. Reservoir from 102 St. October 23, 1862.” By Victor Prevost, from the New York Public Library)
Looking Ahead
- The New York City Municipal Water Finance Authority plans to sell $450 million of tax-exempt Second General Resolution Revenue Bonds the week of December 2 via negotiated sale.
- New York City plans to sell $1 billion of General Obligation bonds the week of December 16.
As always, we appreciate your interest in New York City bonds.
Marj Henning
Deputy Comptroller for Public Finance