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MTA Issues $1.3 Billion in Bonds

By Munichain News Desk
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New York’s Metropolitan Transportation Authority sold $1.29 billion in transportation revenue bonds to refund previously issued securities.

The bonds mature between 2028 and 2049, yielding between 2.74% and 4.2%. They received an underlying rating of AA from Fitch Ratings, AA from Kroll Bond Rating Agency, A3 from Moody’s Investors Service, and A- from S&P Global Ratings, which assigned an insured rating of AA.

The rating “explicitly recognizes the likelihood of support from New York State,” to the MTA, Fitch analysts wrote. Fitch also upgraded the MTA’s outstanding transportation revenue bonds to AA from A.

The issuance marks the first MTA sale of fixed-rate transportation revenue bonds since 2021. It comes ahead of the expected June launch of a congestion pricing program that the MTA projects will raise revenue by $1 billion annually. But the debut of congestion pricing could be delayed by litigation brought by New Jersey Governor Phil Murphy, who argues that the program’s environmental burden on his state has not been fully studied.

The MTA will use the issuance proceeds to refund bonds it sold in 2021. The authority sold an additional $800 million in bond anticipation notes last week.

The MTA is charged with running public transportation in New York City and its surrounding suburbs. It primarily collects revenue through fares on subways, buses, and commuter railroads. The bonds are special obligations of the MTA, payable by a gross lien on its revenue.

Jefferies LLC served as lead underwriter on the issuance, purchasing the bonds for $1.4 billion. The price reflected a premium of more than $100 million. Public Resources Advisory Group, Inc and Backstrom McCarley Berry & Co, LLC acted as financial advisors.


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