A New York state authority issued $926.6 million in bonds to finance capital improvements projects and refund previous issuances.
The Dormitory Authority of the State of New York (DASNY) sold the bonds in two series. The tax-exempt Series 2023A bonds, consisting of $888.9 million, mature between 2027 and 2042, yielding between 3.03% and 4.3%. The taxable Series 2023B bonds, consisting of $37.7 million, mature between 2033 and 2043, yielding between 5.252% and 5.67%. The securities received a rating of Aa1 from Moody’s Investors Service and AA+ from S&P Global Ratings.
The rating “reflects the contingent nature of the appropriation requirement for debt service, offset by the essentiality of projects financed by the bonds and the very strong incentive to appropriate,” according to Moody’s.
The issuance comes amid volatility in New York tax revenue in line with boom-and-bust economic cycles, according to S&P. The state collected $68 million in personal income taxes in the 2021-22 fiscal year; it projects receipts of just $53 million—a 22% decline—for the upcoming fiscal year.
DASNY finances health and education infrastructure in New York. The bonds are special obligations of the authority, payable by personal income tax revenue.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for more than $1 billion. The price reflected an original issue premium of $93 million.