The New York City Transitional Finance Authority issued $1.25 billion in bonds to finance general city capital expenditures.
The authority sold the bonds in two series. The tax-exempt Subseries F-1 bonds, consisting of $1 billion, mature between 2036 and 2054, yielding between 2.81% and 4.34%. The taxable Subseries F-2 bonds, consisting of $250 million, mature between 2026 and 2036, paying interest at rates between 4.36% and 4.82%. The securities received a rating of AAA from S&P Global Ratings, Aa1 from Moody’s Investors Service, and AAA from Fitch Ratings.
The rating reflects “solid long-term growth prospects for pledged revenues and the bonds’ highly resilient structure,” Fitch analysts wrote.
The bonds are payable by personal income tax and sales and use tax revenue. The city collected $17.2 billion in personal income taxes and $9.5 billion in sales tax revenue last fiscal year.
The New York state legislature created the Transitional Finance Authority in 1997 as a public benefit corporation tasked with funding New York City’s capital improvement plan. Its primary funding mechanism is debt, the vast majority of which consists of bonds. As of fiscal year 2023, the authority has $53.5 billion in debt outstanding, according to the comptroller’s office.
Siebert Williams Shank & Co, LLC served as lead underwriter on the issuance. Public Resources Advisory Group and Frasca & Associates, LLC acted as financial advisors.