The New York City Transitional Finance Authority (TFA) issued $2.46 billion in bonds to refund previously issued securities.
The authority sold $2.25 billion in tax-exempt bonds and $210 million in taxable bonds. The tax-exempt bonds mature between 2024 and 2041, yielding between 2.94% and 3.5%. They pay interest at 5%. The taxable bonds mature between 2025 and 2029, paying interest at rates between 4.574% and 5%. The securities received a rating of AAA from Fitch Ratings, Aa1 from Moody’s Investors Service, and AAA from S&P Global Ratings.
The rating reflects “solid long-term growth prospects for pledged revenues and the bonds’ highly resilient structure,” Fitch analysts wrote.
The authority will use the issuance proceeds to refund 18 series of bonds that it sold between 2009 and 2023.
TFA is one of the biggest municipal issuers in the United States, and its bonds are a primary funding mechanism for New York City’s capital projects. The authority expects that it will issue around $6 billion in bonds per year over the next four fiscal years, according to the official statement accompanying the sale of the bonds. TFA sold $1.4 billion in bonds last December.
The bonds are payable by a subordinate lien on personal income taxes and sales and use taxes.
Ramirez & Co, Inc served as lead underwriter on the issuance. Public Resources Advisory Group, Inc and Frasca & Associates, LLC acted as financial advisors.