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New York Sells $824 Million in Bonds

By Munichain News Desk

The New York State Urban Development Corporation issued $823.8 million in bonds to finance capital improvements and refund previously issued securities.

The corporation, which is better known as Empire State Development, sold the bonds in two series. The Series 2023A bonds, consisting of $489.1 million, mature between 2034 and 2063, yielding between 2.5% and 4.09%. The Series 2023B bonds, consisting of $334.6 million, mature between 2025 and 2042, yielding between 2.39% and 3.39%. The securities received a rating of Aa1 from Moody’s Investors Service and AA+ from Fitch Ratings.

“The Aa1 rating on the State Personal Income Tax Revenue Bonds 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,” Moody’s analysts wrote.

The bond proceeds will fund New York state projects, including Metropolitan Transportation Authority (MTA) initiatives.

Soon after the issuance, New York Governor Kathy Hochul announced that a housing development program in the Gowanus neighborhood of Brooklyn overseen by Empire State Development had received 19 applications for 19 different project sites. Together, the sites could host up to 5,500 units of new housing, including up to 1,400 affordable units.

The plan comes amid a push by New York officials to resolve a housing shortage that has coincided with a rise in homelessness across the state. There are almost 92,000 New Yorkers without a home on a given night, according to the National Alliance to End Homelessness, a nonprofit. 

The bonds are special obligations of the corporation, payable by personal income tax revenue. They are backed by New York state statutory requirements to appropriate funds toward Empire State Development’s debt service.

Jefferies LLC and Truist Securities, Inc won competitive bidding processes for the Series 2023A bonds. Wells Fargo Bank, NA, won such a process for the Series 2023B bonds. Public Resources Advisory Group acted as financial advisor.

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