News
Public Finance Wrap-Up: September 2020
Financings in September
The City and its related issuers successfully executed two financings for tax-exempt, fixed rate bonds and taxable fixed rate bonds in September.
New York City Transitional Finance Authority (TFA)
On September 15, TFA began the sale of $1.3 billion of Future Tax Secured Subordinate bonds, comprised of tax-exempt fixed rate bonds and taxable fixed rate bonds.
During the one-day retail order period for the tax-exempt bonds, TFA received $354 million of orders. During the institutional order period, TFA received approximately $2.7 billion of orders, for a total oversubscription of 3.2 times the bonds offered for sale. The proceeds from the bonds will be used to fund capital projects and to pay the purchase price of various series of floating rate bonds upon their conversion to fixed rates.
The underwriting syndicate for the tax-exempt bonds was led by book-running lead manager Jeffries, with Bank of America, Citigroup, J.P. Morgan, Loop Capital Markets, Ramirez & Co., RBC Capital Markets, Siebert Williams Shank and Wells Fargo Securities serving as co-senior managers.
Additionally, as part of the sale, $173 million of taxable fixed rate bonds were sold via a competitive bid, with BofA Securities as the winning bidder.
For a full overview of the transaction, read the announcement.
New York City Municipal Water Finance Authority (NYW)
On September 22, NYW held a priority order period for individual investors and received over $133 million in retail orders. On September 23, institutional investors responded with over $1.1 billion in orders. Due to this strong investor demand, the transaction size was increased from $533 million to $650 million of bonds.
Upcoming Transactions
For more information on upcoming financings and news, visit our website.
Change of Ratings By Moody’s on Various New York State and New York City Bonds
After a 2019 Moody’s upgrade of the City’s GO bonds, which cited the strength of the City’s finances, Moody’s lowered the City’s general obligation bond rating from Aa1 to Aa2. Ratings on bonds of New York State authorities backed by the State Personal Income Tax and Sales Tax, as well as the State’s general obligation bond ratings, were also lowered. These downgrades demonstrate another way the pandemic and the public health response to it has challenged the City’s and State’s economies.
Building on its multi-decade history of sound financial management, the City will endeavor to find creative and responsible solutions as it navigates through these challenging times. To review the GO ratings report in its entirety, click here.
TFA Future Tax Secured (FTS) bonds were unaffected by the Moody’s ratings changes, maintaining a rating of Aaa on the senior debt and Aa1 on the subordinate FTS bonds, with a negative outlook.
Marj Henning
Deputy Comptroller for Public Finance
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