The New York City Transitional Finance Authority sold about $1.1 billion future tax secured fixed-rate subordinate bonds, a spokesman for city comptroller John Liu said late Wednesday.
The sale included $650 million of tax-exempt new money bonds, $350 million of taxable new money bonds, and roughly $91 million of taxable new money qualified school construction bonds, the spokesman said.
The TFA, which funds a portion of the city’s capital needs, received about $150 million of retail orders for the tax-exempt bonds during the two-day retail order period that preceded Wednesday’s sale. At the final pricing after institutional order period, “strong investor demand” made it possible to reduce yields by one to three basis points in 10 maturities, according to Liu’s office.
Final stated yields on the $650 million of tax-exempt fixed-rate bonds varied by coupon and maturity, ranging from 0.34% in 2015 to 4.62% in 2042. The tax-exempt fixed-rate bonds were sold by negotiated sale by the TFA’s financing syndicate, led by book-running senior manager Goldman, Sachs & Co. Co-senior managers were Barclays Capital, Bank of America Merrill Lynch, JPMorgan, Loop Capital Markets LLC, Morgan Stanley, and Wells Fargo.
The TFA received nine bids for the $350 million of taxable new money bonds offered. JPMorgan submitted the winning bid with a true-interest cost of about 3.8%. The TFA received nine bids for the $91 million of taxable QSCBs with a single maturity in November 2032. Barclays Capital Inc. submitted the winning bid, with a true-interest cost of about 4.45%.
The federal government will subsidize the interest on these bonds.
Fitch Ratings and Standard & Poor’s rate the bonds AAA, while Moody’s Investors Service assigns its Aa1 rating.
The TFA also intends to price $125 million of tax-exempt new money variable-rate demand bonds on Nov. 12, bringing the total sale to about $1.2 billion.