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Public Finance Wrap-Up: September 2021

October 5, 2021
Late Summer in Flushing Meadows | Photo credit: Leonard Zhukovsky | Shutterstock

New York City Transitional Finance Authority Announces Successful Sale of $1.2 Billion of Future Tax Secured Subordinate Bonds

On September 2, the New York City Transitional Finance Authority (“TFA”) announced the successful sale of $1.2 billion of future tax secured subordinate bonds, comprised of $950 million of tax-exempt fixed rate bonds and $250 million of taxable fixed rate bonds. Proceeds from the sale will be used to fund certain capital projects.

During the retail order period for the tax-exempt bonds, TFA received just under $192 million of orders from retail investors, of which about $148 million was usable. The institutional order period garnered approximately $2.0 billion of priority orders, representing around 2.5x the bonds offered for sale to institutional investors.

Given the strong demand, yields were reduced by 3 basis points for maturities in 2037 through 2039, 2 basis points in 2045 and 2048, except for the 2.5% coupon in 2048 which was left unchanged, and 1 basis point in 2027. Final yields ranged from 0.15% in 2023 to 2.5% for the 2.5% bond maturing in 2048.

The tax-exempt bonds were underwritten through TFA’s underwriting syndicate led by book-running lead manager RBC Capital Markets, with BofA Securities, Citigroup, Jefferies, J.P. Morgan, Loop Capital Markets, Ramirez & Co., Siebert Williams Shank, and Wells Fargo Securities serving as co-senior managers.

TFA also sold $250 million of taxable fixed rate bonds via competitive bid. The bid attracted 10 bidders, with Wells Fargo Securities winning at a true interest cost of 1.806%.

New York by the Numbers

The Comptroller’s Office continues to track key economic indicators, including in its Monthly New York by the Numbers. Notably, employment continued to grow in the City through September as unemployment claims continued to fall. Additionally, increased real estate sales have driven transaction tax collections higher, and total real estate transaction taxes were higher in the first months of Fiscal Year 2022 than before the onset of the pandemic.

Looking Ahead

You can sign up on the City’s Comptroller’s website to receive notices of upcoming NYC bond sales. Click on “Join Mailing List” at the very top of the page. Bond sale announcements are also posted on the website.

Marj Henning
Deputy Comptroller for Public Finance

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$242 billion
Aug
2022