DASNY Picks New Underwriting Slate

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The Dormitory Authority of the State of New York yesterday announced the selection of a new slate of underwriters and gave preliminary and final approval to sales of $772.6 million of debt at its monthly board meeting.

"This is a transformative moment for the Dormitory Authority and for the State of New York," executive director Paul Williams Jr. said in a statement. "Our new panel of underwriters significantly expands opportunity for firms owned by minority members and women and gives the authority access to the world-class skill and talent we need to execute bonds deals for our clients."

DASNY announced its selection of underwriters, its first under the guidelines of a task that was created last year by Gov. David Paterson to increase participation of minority- and women-owned underwriting firms. All 51 firms that responded to a request for proposals released in December were assigned a spot in the syndicate.

The new slate expanded the number of eligible senior managers to 13 firms from 10 and doubled the number of minority- and women-owned firms to four. Nearly half of the senior managers chosen had not been on the previous senior manager slate.

The newly selected senior managers include Banc of America Securities LLC, Barclays Capital, Ramirez & Co., RBC Capital Markets, Siebert Brandford Shank & Co., and Wachovia Bank NA. Returning in the senior manager position were Citi, Depfa First Albany Securities LLC - soon to be called Jefferies & Co. - Goldman, Sachs & Co., JPMorgan, Loop Capital Markets LLC, Morgan Stanley, and MR Beal & Co.

In a sign of how the muni business has changed with firms leaving the business or disappearing, three firms that had been senior managers - Bear Stearns & Co., Lehman Brothers, and UBS Securities LLC - were not on the list.

DASNY also expanded the slate of eligible co-managers to 22 firms from 18 and approved 16 selling group members. The new guidelines shorten the length of the term the underwriters serve to two years from three years. The panel's term can be extended for one six-month period automatically and for an additional six months under "extraordinary circumstances."

The slate was chosen by staff and did not require board approval. The position on the slate applies to state-backed borrowings. Conduit borrowers, such as nonprofit medical facilities and colleges that issue through DASNY, can choose their own underwriting team from the list of 51 firms.

Earlier this month the New York State Environmental Facilities Corp. was the first agency to chose a slate of underwriters under the new guidelines. The New York State Housing Finance Agency plans to announce its new slate at its April 2 board meeting. The New York State Thruway Authority and the Empire State Development Corp. plan to issue RFPs for underwriters using the new guidelines later this year.

DASNY was the second largest issuer in the nation last year after California, marketing some $4.64 billion of bonds, according to Thomson Reuters. The authority has sold $25.93 billion of new money bonds since 2000, including $704 million in 2009, according to Thomson Reuters.

The board gave final approval to three bond transactions, including up to $465 million of bonds under the state's Mental Health Services Facilities Improvement Program. The bonds, which will be sold in a negotiated sale with maturities of up to 30 years, are backed by state appropriation.

Hawkins Delafield & Wood LLP is bond counsel. Underwriters have not been chosen yet.

Also receiving final approval was Samaritan Medical Center with up to $62 million of tax-exempt variable-rate debt with maturities up to 27 years. Proceeds will be used for renovations, capital construction, and refinancing. KeyBanc Capital Markets PLLC will lead manage the deal. Harris Beach PLLC is bond counsel. The bonds will have direct pay letters of credit from KeyBank and HSBC.

The board also approved $54.6 million of bonds on behalf of NYSARC Inc., a nonprofit serving the developmentally disabled. KeyBanc will lead manage the sale of the bonds that will have maturities up to 30 years. The proceeds are primarily for refinancing, but also for new money projects.

DASNY gave preliminary approval to $125 million on behalf of Yeshiva University, $21 million of bonds for the Nassau County Board of Cooperative Educational Services, and $45 million for New York Law School.

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