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The Dormitory Authority of the State of New York



State Personal Income Tax Revenue Bonds, Series 2022B

March 15, 2022


Image by Sam Mgrdichian

The proceeds of the Bonds will be used to: (i) finance, refinance, or reimburse all or a portion of the costs of certain programs and projects within the State, (ii) refund DASNY’s 2012A State University Educational Facilities Bonds and (iii) pay costs of issuance with respect to the Bonds.

While SWS and JP Morgan were responsible for the Series 2022B (Taxable) Bonds and Series 2022A (Tax-Exempt) Bonds, respectively, both firms jointly structured the aggregate $3.0 billion financing. Leading up to pricing, SWS and JP Morgan presented multiple scenarios to the financing team including various amortizations, savings patterns, couponing alternatives, and call options.

Leading up to pricing, the market was extremely volatile. Following the Russian invasion of Ukraine on February 24th, Dow futures fell 800 points in pre-market trading and energy prices soared with crude oil rising to $110.6 per barrel on March 2nd. The 2-, 5- and 10-year U.S. Treasury rates had daily swings as wide as 19, 20 and 15 basis points, respectively, due to the risk and overall uncertainty surrounding the events abroad. Additionally, rising inflation continued to be a pressing concern for investors as the Fed’s first rate hike of 25 bps was anticipated leading up to the the FOMC meeting on March 16th. 

On the day of pricing, bonds saw a slight rally overnight and treasuries were better by 2-3 basis points. PPI was released at 0.8% on the morning of guidance, favorably lower than the expected 0.9%. However, throughout the day, treasuries give back some of the gains that the market opened up with.

To keep the financing team abreast of important changes in the market, SWS and JP Morgan held weekly market update calls starting a month before pricing, in addition to separate working group calls.  A Structure Wire was released on Thursday, March 10th and a Pre-Marketing Wire on Friday, March 10th, the week before pricing. In order to mitigate any potential drastic market changes that may occur overnight, SWS prepared an expedited single day taxable pricing schedule, in addition to a more traditional two-day schedule including IOI, Price Guidance and Launch.

The transaction was well received by investors, especially given the overall volatility in the market

Orders for the 2022B series totaled $1.9 billion from a mix of investors including money managers, insurance cos., bank portfolios, bond funds, SMAs, and among others, resulting in the deal being 2.9x oversubscribed. Subscription levels for each maturity ranged from 1.1x to 6.0x.


Strong investor interest allowed SWS to tighten spreads in most maturities. Investor interest in the earlier maturities was particularly strong, which allowed SWS to tighten spreads by as much as 13 basis points.

The final tax-exempt and taxable structure included 17 new money projects and two series of refunded bonds, while achieving a structure with level debt service and satisfying weighted average extended life requirements. Ultimately, DASNY selected the following structure for the Series 2022B (Taxable) Bonds: level debt service with serials from March 15, 2023 through March 15, 2035, and a 2037 term bond. Before March 15, 2032, the Bonds are subject to a Make-Whole Call and a 10-Year Par Call on or after March 15, 2032.

The refunding portion of the 2022B Bonds achieved net present value savings of $1.3 million, or 6.46% of refunded bonds. The new money and refunding 2022B Bonds collectively achieved an All-In TIC of 3.702%.

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