The New York City Transitional Finance Authority (TFA) is selling $1.9 billion in future tax secured subordinate bonds to fund capital projects.
The bond sale consists of $1.5 billion of tax-exempt, fixed-rate bonds (Subseries B-1) and $415 million of taxable, fixed-rate bonds (Subseries B-2). The TFA has listed pricing for the sale that opened Aug. 19. Retail investors had the opportunity to place orders for the Subseries B-1 bonds one day earlier, on Aug. 18.
Entities will be able to place bids for both bonds until their closing date on Aug. 27. Applicants will be required to negotiate Subseries B-1 bonds, while Subseries B-2 bonds will be open for competitive bidding.
Due to its competitive bidding model, the authority has stated that all Subseries B-2 bonds will be awarded to a single bidder. The winner will be the bidder whose bid results in the lowest true interest cost on the bonds according to the amortization requirements. The authority may adjust the annual principal installments as needed before and after bids are placed.
Operating under the fixed rate model means each bond will have an interest rate fixed to the maturity date of the bonds. Subseries B-1 bonds will mature between Nov. 1, 2027 through Nov. 1, 2031 and Nov. 1, 2040 through Nov. 1, 2054. Subseries B-2 bonds will mature between Nov. 1, 2031 through Nov. 1, 2039.
The TFA notes that bonds maturing after Nov. 1, 2036 will have optional redemption or mandatory tender after that date. Those maturing before Nov. 1, 2036 will have make-whole optional redemption or mandatory tender at any time before maturity.
Photo by Pixabay from Pexels
For more of the latest from the expansive government marketplace, check Government Market News daily for new stories, insights and profiles from public sector professionals. Check out our national contracting newsletter here.
