The Battery Park City Authority issued $732.5 million in bonds to make infrastructure and other capital improvements.
The authority sold the bonds in three series. The Series 2023A bonds, consisting of $339.8 million, mature between 2041 and 2053, yielding between 3.45% and 3.81%. The Series 2023B bonds, consisting of $383.5 million, mature between 2023 and 2038, yielding between 2.66% and 3.13%. The Series 2023A and Series 2023B bonds each pay interest at 5%. The Series 2023C bonds, consisting of $9.2 million, mature on November 1, 2028, yielding and paying interest at 4.8%. The securities received a rating of Aaa from Moody’s Investors Service and AAA from Fitch Ratings.
The rating reflects “solid growth prospects for pledged revenues and expected strong resilience to revenue declines, which offset concerns about concentration risk of commercial office properties and the financial services sector,” according to Fitch.
The authority will use the bond proceeds to make a series of improvements aimed at reducing carbon-dioxide emissions and making Battery Park City more resilient to the effects of climate change. Projects include expanded electric vehicle charging stations, the development of perimeter storm barriers, flood protection initiatives, and the addition of new bike lanes.
Battery Park City is a residential neighborhood on the west side of Manhattan’s southern tip, home to approximately 17,000 residents. Its location has made it particularly susceptible to severe weather events.
In 2012, Superstorm Sandy dealt millions of dollars in damage to the neighborhood. Experts warn that climate change will cause storms like Sandy to become more common, putting much of lower Manhattan at risk. In 2019, a study commissioned by the city found that 37% of lower Manhattan properties will be at risk of storm surge by 2050.
The Battery Park City Authority is a “public benefit corporation whose mission is to plan, create, coordinate, and sustain a balanced community of commercial, residential, retail, and park space,” according to its website. The bonds are special obligations of the authority, payable by revenue derived from payments in lieu of taxes from tenants in the neighborhood.
Morgan Stanley & Co LLC served as lead underwriter on the issuance, purchasing the bonds for $814.6 million. The price reflected a premium of more than $80 million.