October 18, 2021
$450 million green bond sale is linked to expansion of the subway system and supports zero-direct emissions, clean transportation
Credit Rating Upgrades reflect pace of development in Hudson Yards and confidence in New York City’s recovery and economic outlook
NEW YORK—Mayor Bill de Blasio and Comptroller Scott M. Stringer today announced that Hudson Yards Infrastructure Corporation (HYIC) will sell the first green bond issued by a City-related entity. Last week, Moody’s Investors Services (Moody’s) upgraded HYIC’s credit rating from Aa3 to Aa2, with a stable outlook, S&P Global Ratings raised its long-term rating from A+ to AA-, with a positive outlook, and Fitch Ratings upgraded its credit rating on HYIC bonds from A to A+, with a stable outlook.
HYIC is a local development corporation created by the City in 2005 to finance the extension of the Number 7 Subway Line to the 34th Street - Hudson Yards station and the creation of a public park. Proceeds from the $450 million green bond sale will be used to refinance bonds issued in 2012 to fund the subway extension, a project that was completed in 2015. The subway extension has helped mitigate the impact of climate change by encouraging low-carbon transportation and has fostered the development of Hudson Yards, a pedestrian-friendly, mixed-use district. By 2019, 6.1 million passengers passed through the station annually, making it one of the top 16% of stations system-wide by annual total use.
"For the sake of both current New Yorkers and future generations of residents, the climate crisis must be met head on,” said Mayor Bill de Blasio. “The sale of Green Bonds is part of our national-leading climate strategy to lower our emissions, reduce our reliance on fossil fuels and build a recovery centered around climate justice.”
“With this historic green bond sale, the first of its kind by a New York City-related entity, the City is safeguarding its future—financially and environmentally,” said Comptroller Scott Stringer. “We must use all the tools at our disposal to address the existential crisis of climate change, and New York City can and should be a leader for cities around the world to reduce carbon emissions by promoting sustainable public transportation and parks. I am pleased that these bonds are being issued as Green Bonds in recognition of the benefits of mass transit and continue to urge the creation of a robust, City-wide Green Bond program.”
Subject to market conditions, the pricing is expected to take place on Wednesday, October 20, 2021 via negotiated sale through HYIC’s underwriting syndicate, led by joint lead managers Goldman Sachs & Co. and Ramirez & Co. Inc.
There will be a retail order period on Tuesday, October 19, 2021.
Credit Rating Upgrades
Moody’s upgrade to Aa2 with a stable outlook brings HYIC to Moody’s second highest level, the same rating that it has assigned to City and New York State bond offerings. The upgrade reflects robust development in the Hudson Yards area, which has led to strong growth in the recurring revenues that support bond repayment, and is projected to eliminate the need for City support payments for the life of the bonds. The upgrade also reflects confidence that the city will not experience a prolonged real estate recession.
S&P’s upgrade to AA- reflects its view of the progress and ongoing development in Hudson Yards and the termination of the 2006 indenture. S&P also cites the City’s general creditworthiness and status as a global economic and employment center as a factor in its rating.
Fitch’s upgrade to A+ is based on the continued strong growth of pledged revenues generated from development in the project area and the termination of the 2006 indenture.
This is not an offer to sell or a solicitation of an offer to buy bonds. Bonds may only be purchased through a broker. Please carefully review the Preliminary Official Statement which describes the bonds.