The Dormitory Authority of the State of New York (DASNY) issued $1.22 billion in bonds to finance infrastructure improvements.
The bonds mature between 2026 and 2056, yielding between 2.92% and 4.1%. They pay interest at 5%. The securities received a rating of AAA from Kroll Bond Rating Agency and Aa1 from Moody’s Investors Service.
The rating “incorporates the strength of New York’s sales tax revenue base, very strong coverage of debt service, and a strong bond payment mechanism,” Moody’s analysts wrote.
The authority anticipates using the bond proceeds to fund transportation projects. These include programs administered by the Department of Transportation, the Metropolitan Transportation Authority, and the Consolidated Local Street and Highway Improvement Program.
New York Governor Thomas Dewey established DASNY in 1944 to finance health and education infrastructure in the state. The bonds are special obligations of the authority, secured by sales tax revenue. The city collected $9.4 billion in sales tax revenue bond tax refund receipts during a recent 12-month period, according to the official statement accompanying the sale of the bonds.
Morgan Stanley & Co LLC, J.P. Morgan Securities LLC, and BofA Securities, Inc served as underwriters on the issuance, purchasing the bonds for $1.35 billion. The price reflected a premium of $129.4 million. Public Resources Advisory Group, Inc acted as financial advisor.