News
Public Finance Wrap-Up: October 2020
Financings in October
The City and its related issuers successfully executed the financings outlined below:
New York City General Obligation Bonds
The City of New York sold $1.1 billion of General Obligation tax-exempt, fixed rate bonds on October 7th. The bonds had a maturity range from 2022 through 2043, and were sold to fund capital projects and to pay the purchase price of certain issues of floating rate bonds in connection with their conversion to fixed rates. The bonds were priced during a two-day retail order period, followed by an institutional order period, with orders resulting in a 4.8x oversubscription. The bonds were underwritten by lead manager Siebert Williams Shank, with BofA Securities, Citigroup, J.P. Morgan, Jeffries, Loop Capital, Ramirez & Co., RBC Capital Markets and Well Fargo Securities serving as co-senior managers.
TFA Building Aid Revenue Bonds
TFA sold $200 million of new money Building Aid Revenue Bonds (“BARBs”) on October 14th via competitive bid. The tax-exempt bonds mature from 2022 through 2050 and were the first BARBs offered since October 2019. The sale attracted ten bidders, with Wells Fargo winning at a true interest cost of 2.79%. Proceeds from these BARBs will fund school construction and other projects included in the City’s five-year educational facilities capital plan.
TFA Converts Recovery Bonds to Fixed Rates
TFA reoffered approximately $131 million of Recovery Bonds maturing over the next two years via competitive sale on October 13th. Proceeds from the sale, along with other funds, were used to pay the purchase price of outstanding variable rate bonds in connection with their conversion to fixed rates. Eleven bidders participated in the competitive sale, with BNY Mellon Capital Markets winning at a true interest cost of 0.29%. The Recovery Bonds were issued after September 11, 2001 to assist with the City’s recovery from the attacks on the World Trade Center.
The New York City Transitional Finance Authority (“TFA”)
On October 28th, TFA completed the pricing of $1.1 billion future tax secured subordinate bonds, comprised of $918 million of tax-exempt fixed rate bonds and $200 million of taxable fixed rate bonds. Proceeds from the sale will be used to fund capital projects and to pay the purchase price of TFA floating rate bonds in connection with their conversion to fixed rates. Following a two-day retail order period on Monday, October 26th and Tuesday, October 27th, the bonds were priced for institutional investors on Wednesday, October 28th.
Led by book-running senior manager Ramirez & Co., with BofA Securities, Citigroup, Jefferies, J.P. Morgan, Loop Capital Markets, RBC Capital Markets, Siebert Williams Shank and Wells Fargo Securities serving as co-senior managers, the negotiated sale garnered strong interest from both retail and institutional investors resulting in an oversubscription of 2.1x and ultimately a reduction of yields across various maturities. Additionally, $200 million of taxable fixed rated bonds were sold via competitive bids, with TD Securities and Jeffries as the winning bidders for two taxable series. For a full overview of the transaction, read the announcement.
Upcoming Transactions
For more information on upcoming financings and news, visit our website.
Looking Ahead
In November, the Office of Management and Budget is expected to release its first quarterly update to the 2021-2024 Financial Plan.
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.
Important Dates to Note
Election Day is upon us! Voting for the Presidential Election will end on Tuesday, November 3rd and early voting is now underway. Check your local voting locations for times and days to cast your vote. Every vote counts – exercise yours.
Sunday, November 1st marks Daylight Savings Time – don’t forget to set your clocks back one hour, and enjoy that extra hour of sleep!
Marj Henning
Deputy Comptroller for Public Finance
Located at Central Park’s second-highest elevation, The Belvedere Castle is near 83rd Street and Central Park West, and offers views of the park’s famous Great Lawn, as well as expansive views of the cityscape. Built in 1869, The Castle was originally built as a simple shell with open window structures and doorways, and later became the center for the New York Meteorological Observatory. The Observatory, which is managed by the United States Weather Bureau, serves as a weather station and Automated Surface Observing System location (what is used to serve the aviation industry). After some renovation, the Castle was transformed a bit from its original Italian infrastructure to a medieval design to better accommodate its usage as a weather center. The Castle also serves as a visitor center and gift shop and offers free programs that include stargazing, wild life education, bird watching and audio guided tours. Volunteers from the NYC Urban Park Rangers serve visitors.