Contact: Colleen Roche/Curt Ritter (212) 788-2958
David Neustadt, Comptroller's Press Office (212) 669-2591
Mayor Rudolph W. Giuliani and Comptroller Alan G. Hevesi today announced the results of a sale of approximately $135 million of New York City General Obligation Refunding Bonds. PaineWebber Incorporated served as book-running senior manager with Goldman, Sachs & Co., J.P. Morgan & Co. and Salomon Smith Barney serving as co-senior managers on the $115 million of tax-exempt bonds. Approximately $20 million in taxable bonds were sold by advertised competitive bids.
A majority of the total tax-exempt bonds were able to be placed with small, individual investors, high net worth individuals or with bank trust departments and investment advisors on behalf of individuals. New York City becomes one of the few issuers to have achieved the sale of such a high percentage of bonds to retail investors. During the retail order period, the twenty-third by the City since it began the practice in 1995, approximately $57 million of bonds were pre-sold, approximately one-half of the total tax-exempt bonds offered. Eight of the 20 maturities were completely sold to retail investors: the maturities from the year 2000 to 2005 and the maturities in 2018 and 2022.
The maximum interest rate of 5.05% in the twenty-four year bond maturity is the lowest achieved on a long maturity in a New York City General Obligation bond issue in at least two decades.
"I am extremely gratified that individual investors demonstrated such strong support for New York City's bond issue," said Mayor Rudolph W. Giuliani. "Combined with the continuing strong buying interest of large institutional investors, this represents a major vote of confidence in the fiscal and economic policies of the City."
"The City saved money on this deal because we have a competitive process: the investment banking firm with the best idea gets to run the deal." said City Comptroller Alan Hevesi. "PaineWebber is not one of the three senior managers for New York City G.O. offerings and has never before been lead underwriter on a G.O. deal. But the firm came in with the most efficient refunding and that is what is important for taxpayers."
Today's bond issue was a refunding of previously issued City debt which resulted in present value savings of approximately $7 million, or over 5 percent of the amount of refunded bonds, and produced more than $9 million of net budget relief for the City.
The City received 10 bids from 11 firms for the approximate $20 million of taxablebonds offered by competitive bidding.