Contact: Curt Ritter, Mayor's Press Office (212) 788-2971
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 $268 million of New York City General Obligation Refunding Bonds. Bear, Stearns & Co. Inc. 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 approximately $228 million of tax-exempt bonds. Approximately $40 million in taxable bonds were sold by advertised competitive bids.
As a result of financial news in international markets, including announcements coming out of Brazil, capital and currency markets evidenced wide swings as the City marketed its refunding. However investor demand was strong. The City received approximately $200 million of priority orders from institutional investors. Despite not having a formal retail order period, orders from retail investors totaled approximately $60 million, or more than 20 percent of the bonds sold. As a result the City was able to increase the size of the refunding from approximately $162 million to approximately $268 million and to reduce yields from two to seven basis points in the various maturities.
Today's bond issue was a refunding of previously issued City debt which resulted in present value savings of approximately $14 million, or over 5 percent of the amount of refunded bonds, and produced more than $17 million of net budget relief for the City.
"I am extremely gratified that investors demonstrated such strong support for New York City's bond issue in such difficult market conditions," 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 meet its financing objectives in difficult markets as well as good markets."
"Despite a very rocky market, the City was able to take advantage of a window of opportunity," said City Comptroller Alan Hevesi. "Through a creative financing structure, the City was able to do both a traditional advance refunding and to unlock savings from otherwise non-advance refundable bonds."
The City received 6 bids for the approximate $40 million of taxable bonds offered by competitive bidding. Lehman Brothers was the winning bidder.