New York City is gearing up for its latest bond issuance, with a hefty $1.8 billion being made available for investors. This sizable offering is part of a larger $12 billion new-issue calendar for the week. The deal consists of two series – $1.5 billion of tax-exempt general obligation (GOs) bonds and $300 million of taxable GOs. The maturity dates for these bonds range from 2026 to 2052. The first series will be offered through negotiation, while the second series will be sold competitively.
Loop Capital Markets is the bookrunning senior manager for this bond issuance, with 25 other firms serving as co-managers on the deal team. Public Resources Advisory Group and Frasca and Associates are the co-municipal advisors, while Norton Rose Fulbright and Bryant Rabino are serving as co-counsel. These key players will play a crucial role in ensuring the success of this bond offering.
Patrick Luby, head of municipal strategy at CreditSights, predicts that demand for these new bonds will be strong, especially with $7.6 billion of redeemed bond principal returning to investors this month from New York issuers. However, he also notes that the pace of redemptions is expected to slow down in September, which could impact reinvestment demand. As a result, the spreads for the tax-exempt series may widen in the coming months.
New York City’s GOs have received favorable ratings from leading agencies, with Moody’s Ratings giving them an Aa2 rating, S&P Global Ratings rating them AA, Fitch Ratings rating them AA, and Kroll Bond Rating Agency rating them AA-plus. The city’s strong budget monitoring and controls, along with its revenue control, have contributed to these solid ratings. In its last deal, the 10-year maturity with a 5% coupon yielded 3.16%, indicating a positive performance in the market.
Looking ahead, New York City is scheduled to have more debt offerings in September, including a $1.8 billion Transitional Finance Authority deal and a $1.3 billion Empire State Development Corporation deal. Additionally, the New York State Environmental Facilities Corp. is set to price $218.84 million of green state revolving funds revenue bonds. These upcoming offerings indicate a busy period for municipal bond investors in New York.
New York City’s $1.8 billion bond issuance presents a significant opportunity for investors to participate in the city’s debt offerings. With strong ratings, favorable market performance, and a robust team of underwriters, this deal is poised to attract substantial demand. As the market conditions continue to evolve, it will be interesting to see how investors respond to these bonds and the overall performance of New York City’s municipal debt.