The city of New York sold $1.56 billion in bonds to refund a previous issuance.
The bonds were issued in four series. The city sold $1.1 billion in subseries F-1 bonds, $150 million in subseries F-2 bonds, $36 million in series G bonds, and $271 million in series 1 bonds. Only the F-2 bonds will be taxable.
The F-1 bonds mature between 2025 and 2039, with yields between 3.12% and 3.64%. The F-2 bonds mature in 2024 and 2025. The F-2 bonds maturing in 2024 account for $133 million of the issuance and carry an interest rate of 5.13%. The remaining $18 million in F-2 bonds carry an interest rate of 4.81%. The series G bonds mature between 2023 and 2035, with yields ranging from 3.12% to 3.56%. The series 1 bonds mature between 2027 and 2036, with yields between 3.12% and 3.38%.
The bonds received a rating of Aa2 from Moody’s Investors Service, AA from S&P Global Ratings, and AA from Fitch Ratings.
The rating reflects “the city’s unique economic profile as an international center for numerous industries and a major tourism destination, as well as its proven resilience through the recent and prior severe economic disruptions, as credit strengths,” according to Fitch.
The issuance comes as New York continues its economic recovery from the COVID-19 pandemic, which has left a lasting imprint on the city’s finances. The city’s financial plan projects a funding gap of $4.2 billion for the upcoming fiscal year.
The bonds are general obligations on the city, backed by its full faith and credit. They will be financed by property taxes.
Jefferies LLC and Siebert Williams Shank & Co LLC served as lead underwriters on the issuance.