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The City of New York Announces Successful Sale of $1.5 Billion of General Obligation Bonds

March 5, 2021

The City of New York (“the City”) announced 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 individual investors, of which almost $554 million was usable. 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 6 basis points for the 2023 maturities, and 2-10 basis points for maturities in 2033 through 2051. Final yields ranged from 0.29% in 2023 to 2.41% for the 5% bonds maturing in 2050 and 2.83% for the 3% bonds maturing in 2051.

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 of about $108 million, maturing in 2028 through 2031, attracted 12 bidders, with Barclays winning at a true interest cost of 2.052%. The second subseries of approximately $92 million, with a par call in 2031, maturing in 2032 through 2034, attracted 13 bidders, with BofA Securities winning at a true interest cost of 2.338%

The tax-exempt stepped-coupon bonds mature in 2044 and may be optionally redeemed at par on June 1, 2025. The interest rate on the bonds will step up to 9% on December 1, 2025 if the bonds are not remarketed, converted to another interest rate mode, or redeemed.

During the order period for the tax-exempt stepped-coupon bonds, the City received over $504 million of orders. Due to strong investor demand, the final yield for the bonds was decreased by 7 basis points, to 0.83%, from the beginning of the order period.

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 22, 2021, the City intends to sell approximately $260 million of adjustable rate remarketed securities (ARRS) to be remarketed by Barclays and BofA Securities.

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$242 billion
Aug
2022