The New York State Thruway Authority is heading back to the market on Wednesday with a $2.2 billion sale of personal income tax bonds.
The competitive sale of the PIT revenue bonds is broken down into six offerings consisting of five tax-exempt series and one taxable deal.
The tax-exempt sales consist of $455.885 million of Bidding Group 2 bonds, $430.38 million of Bidding Group 1 bonds, $428.87 million of Bidding Group 3 bonds, $364.25 million of Bidding Group 5 bonds and $360.365 million of Bidding Group 4 bonds. Additionally, $154.225 million of Series 2022B taxables are being sold.
Public Resources Advisory Group is the financial advisor on the sale while Nixon Peabody and D. Seaton & Associates are co-bond counsels.
The Thruway Authority is one of only five issuers authorized to sell bonds backed by personal income taxes in New York. The other four are the Dormitory Authority of the State of New York, the New York State Environmental Facilities Corp., the New York State Housing Finance Agency and the New York State Urban Development Corp.
Moody’s Investors Service has an A1 rating on the authority’s outstanding revenue bonds while S&P Global Ratings has an A rating on the bonds A. Both agencies have stable outlooks on the credit. The state's PIT bonds were rated AA-plus by S&P and Fitch Ratings.
The authority was last in the competitive arena on Sept. 23, 2021, when J.P. Morgan Securities won a $288.76 million issue of Series O general revenue bonds with a true interest cost of 2.9439%.
The authority last sold PITs competitively last July when BofA Securities won $240.8 million of Series 2021A-1 transportation tax-exempts with a TIC of 3.1692%.
Since 2011, the authority has sold nearly $14 billion of bonds, with the most issuance occurring in 2012 when it offered $2.7 billion. It was not in the market in 2015 or 2017.
On April 13,
Moody’s said the state’s upgrade reflected “a significant increase in resources combined with agile financial management that has resulted in balanced or nearly balanced budgets projected through the state's five-year financial plan.”
The state's GOs are rated AA-plus by S&P, Fitch and Kroll Bond Rating Agency.
New York State, the city along with counties and related agencies sold over $48 billion of debt in 2021, the third most in the nation.
Moody’s action came after New York approved a
Comptroller Thomas DiNapoli said the state’s reliance on certain fiscal 2021-2022 enacted budget actions, including temporary personal income tax increases on high-income earners, created additional risk.
“In 2019, taxpayers with incomes of at least $1 million represented 1.2% of total PIT taxpayers and provided 38.2% of PIT liability,” DiNapoli said in a statement this week. “The temporary PIT rate increase results in the state being more dependent on high-income taxpayers; these taxpayers typically have income from more volatile sources, such as capital gains.
PIT revenues are reliant upon taxpayers continuing to be taxpayers, and remaining residents of New York.
According an
“While this occurred at every income level, the number of taxpayers with incomes over $1 million that left the state were nearly double those that moved in,” the analysis showed.
