New York City plans to begin selling $800 million of new-money tax-exempt general obligation bonds next week, the city announced on Friday. It also plans to competitively sell $165 million of taxable GO bonds on Aug. 6. A three-day retail order period for the tax-exempt piece will begin on Aug. 1 with institutional pricing beginning on Aug. 6.
JPMorgan will serve as book-running senior manager on the deal and Citi, Merrill Lynch & Co., and Morgan Stanley will serve as co-senior managers.
Sidley Austin LLP is bond counsel. Public Resources Advisory Group and A.C. Advisory Inc. are financial advisers.
The decisions on the structure of the bonds and whether to insure them have yet to be made.
New York City has sold $3.31 billion of GO bonds this year, according to Thomson Reuters data.
Moody's Investors Service assigns its Aa3 rating to the city's GO credit. Standard & Poor's and Fitch Ratings rate the city AA and AA-minus, respectively.
The announcement came the same day Mayor Michael Bloomberg said that the city is starting to experience the impact of the national downturn in the real estate business and economy as a whole.
"We're doing better than the rest of the country, but it's going to get to us - it's starting to get to us," Bloomberg said. "The economy is slowing down worldwide, throughout the county, [and] here, it's only question is how much."
Signs of a weakening economy showed up in a state revenue report released last week by New York Comptroller Thomas DiNapoli's office.
Business taxes in the first quarter of the fiscal year came in at $1 billion, which was $453 million below projections and $273 million lower than last year. A large portion of that drop was from bank taxes, which came in $152 million below projections.
"What's perhaps different about the slowdown that we're going into is we've known its coming but a lot of the economic numbers hadn't been showing it," said Fitch director Douglas Offerman. "But now we're finally starting to see an impact on the job side and so its not a surprise at all to see the declining trend in revenues."