← Back to Latest News

NYC’s MTA Sells $600 Mln in Green Bonds

By Munichain News Desk

A division of New York’s Metropolitan Transportation Association (MTA) sold $600 million in bonds to finance low-emissions transportation projects.

The bonds, issued by the Triborough Bridge and Tunnel Authority, mature in 2028 (yielding 2.84%), 2030 (yielding 2.86%), and 2033 (yielding 2.88%). All of the bonds pay interest at 5%. The securities received a rating of AA+ from Fitch Ratings, AA+ from S&P Global Ratings, and AA+ from Kroll Bond Rating Agency.

The issuance comes as New York enacts its fiscal year 2024 budget, which includes a plan to increase MTA revenue. 

“The multi-part plan will produce additional funding for the MTA to replace reduced operating revenues caused by enduring patterns of lower weekday ridership following the recovery from the COVID-19 pandemic,” according to Fitch.

The city has long been seeking ways to increase MTA revenue, especially after the pandemic decimated ridership. MTA revenue has yet to recover to its prepandemic level amid enduring work from home policies and an increase in crime last year. The authority manages public transportation in New York City and its surrounding suburbs, as well as seven bridges and two tunnels that connect the city’s boroughs.

Last month, the city cleared the final hurdle to begin implementing congestion pricing, which would impose a fee on drivers entering Manhattan below 60th street. City officials say the plan could go live as early as next spring and generate as much as $1 billion in additional annual revenue for the MTA. The plan could also improve air quality and reduce emissions in the city by limiting the amount of cars that enter Manhattan.

The bonds sold this week are special obligations of the MTA, backed by a payroll mobility tax that was increased in the state’s latest budget. Effective July 1, the state almost doubled the top payroll mobility tax rate on New York City employers from 0.34% to 0.6%. The change is expected to create an additional $1.1 billion in annual revenue, according to a press release from the governor’s office. Last year, the state collected $1.8 billion in payroll mobility tax revenue.

Ramirez & Co Inc served as lead underwriter on the issuance, purchasing the bonds for more than $683 million. The price reflected a premium of $86 million and a discount of $2.5 million.

Subscribe to the Munichain Newsletter

The latest municipal bond market news and insights delivered to your inbox.