top of page
NYC Transitional Finance Authority



Future Tax Secured Subordinate Bonds

February 7, 2024


Image by Sam Mgrdichian

Proceeds of the issue will be used to finance general City capital expenditures.

Marketing & Market Conditions:

The municipal market the week prior to pricing (Week of January 29th) had strong and limited supply and was the third consecutive week of municipal fund inflows. During the prior week, Chairman Powell commented that a rate cut in March was unlikely and that the FOMC will continue to remain data dependent. February 2nd’s payroll data came in much stronger than expected and appeared to confirm the “higher for longer” narrative. Owing to this market data, MMD experienced volatility in the days leading up to pricing, with a 5 basis point cut across the yield curve on Friday, February 2nd, and a 10-12 basis point cut across the yield curve on Monday, February 5th. Despite these significant increases in yield, the morning of the Retail Order Period opened up relatively steady – MMD was stable and U.S. Treasuries were slightly weaker. SWS assisted in preparing the investor roadshow, which received 130 unique views.

Retail Order Period:

On the morning of the Retail Order Period, all maturities were offered and generated order flow, with notable oversubscription levels in 2038 and 2039 of 1.73x and 1.30x, respectively. Despite a volatile market leading up to the Retail Order Period, retail spreads were within -1 – 2 basis points of the consensus scale. Retail investors placed a total of $319.3 million in orders, of which $293.2 million was usable.

Institutional Order Period:

On February 6th, MMD was bumped 2 basis points in 2025 and left unchanged from 2026 – 2054. Despite this MMD stability, institutional investors provided initial interest at higher spreads than was utilized during the Retail Order Period. These indications, along with the scheduled 1:00pm $42 billion 10-year Treasury Auction (the largest 10-year auction in history), and the backloaded structure, highlighted a need to adjust pricing in certain maturities to build a strong book of institutional interest.

The Institutional Order Period contained a near-identical structure to the Retail Order Period, with the exception of a now-bifurcated 2047 maturity offering both a 4% and a 5% coupon .

Following SWS’ recommended pricing strategy, TFA received $4.45 billion in institutional orders to bring the total order book to $4.74 billion orders.

The transaction was subscribed between 0.68x – 7.22x across all maturities, with notable oversubscription levels in the 2042 maturity (6.06x) and the 2053 term maturity (7.22x).

Pricing Results:

Overall, the transaction concluded with $4.34 billion in institutional priority orders, which combined with retail orders brought the overall book to $4.62 billion in orders (excluding stock orders) from 106 unique investors. After all adjustments, the financing was 4.62x oversubscribed with subscription levels ranging between 0.86x – 7.17x across all maturities. SWS underwrote $7.9 million in unsold balances.

bottom of page