New York’s Metropolitan Transportation Authority tabled the selection of a new underwriting syndicate after a board member questioned the choices at a finance committee meeting Monday.
“A few of us felt that the senior manager pool predominantly contained the same firms that have been serving us in one guise or another for years and that it needed to be broadened a bit,” board member Doreen Frasca said in an e-mail.
MTA staff selected seven firms to serve as senior managers: Bank of America-Merrill Lynch, Goldman, Sachs & Co., Ramirez & Co., Siebert Branford Shank & Co., Citi, Barclays Capital Inc. and JPMorgan. They also recommended 19 firms to serve as co-managers.
“The selection committee is reviewing what can be done in light of her concerns,” MTA spokesman Aaron Donovan said in an e-mail. “This may come before the board at the full board meeting on Wednesday or it may wait until next month.”
The authority issued a request for proposals in June for underwriters. It received responses from 27 firms seeking to be qualified as senior manager and 18 seeking to be serve as co-managers. The agency plans to issue $1.64 billion of debt next year.
MTA staff recommended that Goldman Sachs be designated as senior manager on the inaugural issuance of a new bond credit secured by a the payroll mobility tax, a tax on employers in the 12 counties served by the authority. The tax was imposed last year as part of a state rescue package and is intended to back $6 billion of bonds to finance two years of the MTA’s capital program. It was originally expected to generate $1.54 billion in 2010, but is now projected to come up $350 million short.
Also tabled were the selection of variable rate remarketing agents and dealers and swap counterparties.
