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MTA Sells $388 Mln in Bonds

By Munichain News Desk
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New York’s Metropolitan Transportation Authority issued $388.5 million in bonds to refund previously issued securities.

The bonds mature between 2025 and 2054, yielding between 2.81% and 4.17%. Fitch Ratings and S&P Global Ratings each assigned the bonds a rating of AA.

The rating is “based on the growth prospects and resilience of the underlying revenues from which pledged receipts are drawn,” Fitch analysts wrote.

The issuance comes after New York Governor Kathy Hochul tabled a congestion pricing plan that the MTA expected would increase its revenue by $1 billion annually. The MTA now expects that it will have to defer some $16.5 billion in capital projects that would have been funded by congestion pricing revenue, according to the official statement accompanying the sale of the bonds. 

Hochul has not released a timeline for resuming the congestion pricing program. Deferred projects had focused on system expansion, ADA accessibility, zero-emission buses, infrastructure and technology upgrades, and other initiatives. The MTA will instead prioritize “good repair projects,” according to the bond documents. 

The MTA also anticipates that it now may have to sell bonds earlier than anticipated. “This earlier debt issuance could increase debt service costs,” the bond documents read.

The bonds are special obligations of the MTA, payable by certain state tax revenue.

BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $424.8 million. The price reflected a premium of $38.1 million and a discount of $1.8 million. Public Resources Advisory Group, Inc and Backstrom McCarley Berry & Co, LLC acted as financial advisors.


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