Press Release Archives - #658-96 NYC Bonds Receive Strong Investor Interest

Archives of the Mayor's Press Office

FOR IMMEDIATE RELEASE
Date: December 18, 1996

Release #658-96

Contact: Colleen Roche (212) 788-2958, Deirdra L. Picou (212) 788-2971
or Leah C. Johnson (212) 669-3747 (Comptroller's Office)

NEW YORK CITY BONDS RECEIVE STRONG INVESTOR INTEREST

Mayor Rudolph W. Giuliani and Comptroller Alan G Hevesi today announced the results of a sale of approximately $626 million of New York City General Obligation Bonds. Lehman Brothers served as book-running senior manager. Bear, Sterns & Co., Merrill Lynch & Co., Prudential Securities and Smith Barney Inc. were co-senior managers. The bonds, the proceeds of which will be used to fund the City's ongoing capital improvement program, were sold in a transaction involving the cooperation of the Municipal Assistance Corporation in an arrangement which will have the additional benefit of creating $626 million of additional margin for the City under its constitutional limit on debt and capital contracts.

The City bonds received strong interest from both retail and institutional investors. Approximately $163 million of orders were received during a two and one-half day retail pre-sale order period which ended at noon on Monday. Over $400 million of priority orders were received from institutions during the final order period Tuesday morning. Interest rates increased in the municipal market on Monday as a result of announcements of stronger than expected economic news. However, the City finalized pricing on its bonds with interest rates only slightly higher than announced at the beginning of the retail pre-sale period on Wednesday morning, December 11. The maximum yield on the 2026 maturity was 6.32 percent.

"With this bond sale, we were able to not only raise over $600 million for the City's capital program," said Mayor Giuliani, "but also to create an additional $626 million of margin under our constitutional debt and capital contract limit. We are pleased with the cooperation of the Municipal Assistance Corporation which has provided support to the City's ongoing capital program in this way."

The Municipal Assistance Corporation was in the market the previous week with a large bond issue which included its own retail order period on Tuesday, December 10. The City will be returning to the market in January with a refunding issue including approximately $475 million of tax-exempt bonds.

"I am particularly happy that interest from both individual and institutional investors was so strong, particularly in light of the unsettled market and the presence of both New York City and the Municipal Assistance Corporation paper in the market," Comptroller Hevesi said. "The combination of both classes of investors has clearly helped strengthen demand for our deals and lowered our overall cost of funds."