Effective structuring and marketing of $857 million General Obligation Bond issuance achieve lowest spreads in the history of the City of New York.

Transaction Components: During the week of September 11th, 2017, SCS served as Senior Manager for NYC’s $857.3 million of tax exempt fixed rate bond issues

The tax exempt issues were structured in conjunction with an additional $250.0 million in taxable bonds offered via competitive bid and a $200 million of variable-rate debt to be offered on October 2, 2017

Innovative New Money Structuring Ideas: SCS developed and worked with the City to evaluate several innovative new money structures designed to reduce debt service during the City’s financial plan years while still complying with complex New York State Local Finance Laws, including the use of a two-series structure. Based on market conditions at time of pricing, the City determined to use a more traditional structure in order to promote stronger execution

Favorable Market Technicals: The municipal market moved to lower yields the week prior to pricing, mostly in conjunction with a move to lower treasury yields. The market continued to be thinly traded and extremely well-bid as technical factors remained favorable due to lower supply, along with heavy bond calls and redemptions. Nineteen transactions were expected the week of September 11th in excess of $100 million – with the City’s offering being the largest

Effective Retail Strategy with Significant Order During Two-Day Retail Order Period: The retail scale generally reflected either the consensus views or was about 1 to 3 basis points lower in spread

• SCS recommended offering an array of couponing alternatives in addition to the standard 5% coupon bonds, including 2.75%, 3.25%, and 4%

• Retail investors placed $205.5 million and $163.8 million of orders on Day 1 and Day 2 of the retail order period, respectively, of which approximately $339 million was usable

• To attract investors to unsubscribed maturities on the second day of the retail order period, retail yields were adjusted with the changes in MMD and select maturities were bifurcated SCS’ adjustments signaled its commitments to maintaining its initial offering spreads

Successful Institutional Pricing Execution: SCS kept spreads to MMD unchanged in all but one of the previously offered maturities during institutional pricing.

• For maturities not offered during the retail order period, SCS recommended utilizing a mix of 4%, 5%, and 5.25% coupons to capitalize on investor demand and drive pricing

• In particular, the 5.25% coupon bonds offered in maturities between 10/1/2030 and 10/1/2033 drew significant investor participation with very favorable pricing spreads—the yield-to-maturities for those bonds was either equal to or within a basis point of the yield-to-maturities for 5% coupon bonds in the same maturities

• This strategy of a diversified coupon structure reduced overall pricing pressure on the 5% coupon bonds and helped maintain pricing spreads for the entire transaction

Achievement of the Lowest Spreads In City’s History: Institutional investors placed $1.6 billion of priority orders which, with retail orders, resulted in total orders of just under $2.0 billion (excluding member orders)

• During the final pricing, yields were further reduced by 2-3 bps for maturities from 2030 to 2033 and 2036 to 2039 and up to 6 bps for maturities in 2040 and 2041

• Final yields ranged from 0.91%-3.38%, representing spreads to MMD ranging from 5 – 70bps, including 24bps on the longest 5% coupon offered (10/1/2039)

• The reception for 5.25% coupons was very strong, as they priced through the shorter maturity 5% bonds on both a YTC and YTM basis