New York City is stepping up to the plate on Tuesday with the second biggest bond sale of the week, a $1.45 billion issue of general obligation bonds.
Set to be priced by Jefferies on Monday for retail investors and on Tuesday for institutions, the tax-exempt GO deal is tentatively structured in four series with two subseries.
The deal consists of $1.1 billion of fiscal 2024 Series D new-money GOs, $163.815 million of fiscal 2024 Series E refunding GOs, $15.23 million of refunding GOs along with $108.365 million of fiscal 2006 Series I Subseries I-4 and $65.02 million of fiscal 2006 Series I Subseries I-5 GOs. The subseries are both reofferings.
Co-managers include BofA Securities, J.P. Morgan, Loop Capital Markets, Ramirez & Co., RBC Capital Markets, Siebert Williams Shank and Wells Fargo Securities.
Additionally, Academy Securities, Barclays, Blaylock Van, BNY Mellon Capital Markets, Cabrera Capital Markets, Drexel Hamilton, Fidelity Capital Markets, Goldman Sachs, Great Pacific Securities, Janney Montgomery Scott, Morgan Stanley, Oppenheimer & Co., Raymond James, Rice Financial Products Co., Roosevelt & Cross, Stern Brothers, Stifel, Nicolaus and TD Securities will serve as co-managers.
PRAG and Acacia Financial Group are the financial advisors. Norton Rose Fulbright and Bryant Rabbino are the bond counsel.
Proceeds will be used to fund capital projects, refund some outstanding bonds for savings and convert floating-rate bonds to fixed-rate.
There are strong legal provisions to reinforce bondholder security, according to an investor presentation.
These include an unlimited capacity to levy property taxes to pay GO bond debt service with all city revenues being made available.
On Jan. 16, Mayor Eric Adams unveiled his
The financial plan projects revenues and expenses for fiscal 2024 and 2025 balanced in accordance with generally accepted accounting principles and projects gaps of about $5.15 billion in fiscal 2026, $5.12 billion in fiscal 2027 and $6.04 billion in fiscal 2028. These gaps represent 4.5%, 4.4% and 5.0% of projected total expenditures in fiscal 2026-2028, respectively.
The city had general fund operating revenues exceeding expenditures in fiscal 2023 of $5.48 billion, before discretionary and other transfers and without regard to certain fund balances permitted to be carried forward, according to the presentation.
The bonds are rated Aa2 by Moody's Ratings, AA by S&P Global Ratings and Fitch Ratings and AA-plus by Kroll Bond Rating Agency.
The city is one of the biggest issuers of municipal bonds in the nation. In the second quarter of fiscal 2024, the city had about $39.7 billion of GOs outstanding.
Last month, the city sold $1.2 billion of
Proceeds of the sale are being used to fund capital projects while a $309.4 million reoffering was also sold to convert outstanding floating-rate bonds to fixed-rate securities.
