New York, New York, issued $1.2 billion in bonds to finance general capital expenditures.
The bonds mature between 2026 and 2054, yielding between 2.64% and 4.25%. They received a rating of Aa2 from Moody’s Investors Service, AA from Fitch Ratings, AA from S&P Global Ratings, and AA+ from Kroll Bond Rating Agency.
The rating reflects New York’s “exceptionally strong budget monitoring and controls,” Fitch analysts wrote. They added that the city’s strong fiscal recovery from the COVID-19 pandemic “will help management navigate through future economic downturns, including near-term challenges due to an expected deceleration of revenue growth, rising labor and asylum seeker costs and other uncertainties associated with a high inflationary environment.”
New York is used to receiving migrants, but a massive uptick in asylum seekers last year has fueled concerns about the city’s ability to balance its commitment to sheltering migrants with financial stability. More than 100,000 asylum seekers are currently residing in New York, according to the city comptroller’s office; the city is budgeting more than $4 billion this year to respond to what Mayor Eric Adams has described as an “immigrant crisis.”
Last year, the city announced a number of plans to reduce costs associated with the arrival of migrants. In response to the “fiscal strain caused by the influx of asylum seekers,” the city froze hiring for jobs not related to health, public safety, and revenue generation, according to the official statement accompanying the sale of the bonds.
The bonds are general obligations of the city, backed by its full faith and credit and payable by property taxes.
BofA Securities, Inc served as lead underwriter on the issuance. Public Resources Advisory Group and Acacia Financial Group, Inc acted as financial advisors.