New York, New York issued $950 million in bonds to make general capital improvements.
The city sold both serial and term bonds. The serials, consisting of $677 million, mature between 2025 and 2048, yielding between 2.93% and 4.12%. The first term bond, consisting of $156 million, matures on August 1, 2051, and yields 4.15%. The second, consisting of $117 million, matures on August 1, 2053, and yields 4.35%. The securities received a rating of Aa2 from Moody’s Investors Service, AA from S&P Global Ratings, AA from Fitch Ratings, and AA+ from Kroll Bond Rating Agency.
“Federal stimulus aid relieved fiscal pressure that would have otherwise resulted from the city’s lagged economic recovery from the pandemic and has supported structural budgetary balance,” according to Fitch.
The issuance follows the state’s forecast of its net revenue for the fiscal year ending in 2023. The $79 billion projection included an 8.2% increase in net revenue over last fiscal year.
The forecast counters expectations. The city expected personal income tax revenues, a significant driver in overall revenue, to decrease by 8% year over year, but now projects them to increase by 3% during fiscal year 2023. However, the city expects personal income tax revenue to decline next year before resuming growth in fiscal year 2027.
The bonds are general obligations of the city, backed by its full faith and credit and payable by property taxes.
Loop Capital Markets LLC, BofA Securities Inc, Citigroup Global Markets Inc, J.P. Morgan Securities LLC, Jefferies LLC, RBC Capital Markets LLC, Samuel A. Ramirez & Co Inc, Siebert Williams Shank & Co LLC, and Wells Fargo Bank, National Association served as lead underwriters on the issuance.