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 $700 million of New York City General Obligation tax-exempt bonds. The proceeds of the financing will be used to fund the ongoing capital program of the City. Goldman, Sachs & Co. served as book-running senior manager with J.P. Morgan & Co. and Salomon Smith Barney serving as co-senior managers.
On Monday of this week, Fitch IBCA, the International Rating Agency, announced that it was upgrading its rating on New York City General Obligation Bonds to "A" from its previous rating of "A minus." In making its announcement, Fitch IBCA stated that the rating upgrade reflects "sustained broad based economic growth," "strong financial operating results" and "demonstrated resolve and effective budget management." The Fitch IBCA upgrade is the third bond rating upgrade to be received by the City of New York on its general obligation bonds in the last 13 months. In February 1998, Moody's Investors Service increased the City's bond rating from "Baa1" to "A3." In July 1998, Standard and Poor's Rating Service increased its rating from "BBB plus" to "A minus."
The interest rates obtained by the City on this financing improved on average by five basis points since the City's most recent general obligation bond financing in January compared to the widely cited MMD national indices for triple A rated bonds published by the Bond Buyer. This occurred despite the fact that a number of other New York State issuers, as well as other large financings outside of New York State, have competed for investor attention. During the two-day retail presale period, orders from retail investors totaled approximately $186 million, or more than 25 percent of the tax-exempt bonds offered. The City received approximately $415 million of priority orders from institutional investors.
"I am extremely gratified by both the bond rating increase from Fitch IBCA and by the strong interest by investors in the City's general obligation bonds," said Mayor Rudolph W. Giuliani. "The confidence which investors continue to demonstrate in the fiscal and economic policies of the City allows the City to continue to fund its capital program at record low interest rates."
"We thank Fitch for recognizing the City's strong and prudent fiscal management and its fundamental economic strength," said City Comptroller Alan G. Hevesi. "And we're glad that retail and institutional investors also recognize where we are and continue to support our bonds as strongly as they do."