NYC-WTC_000195490

NYC 9/11 Public Portal Document

Since 1998, the TFA has maintained three bond financings a year, averaging $500 million to $600 million per issue. In 2001, TFA also implemented three transactions: Series 2001A in October 2000, Series 2001B in February 2001 and Series 2001C in April 2001. The TIC for the three tax-exempt financings ranges between 4.7% for Series 2001'C to 5,36% for Series 2001A. Total During 2001, the TFA also added $300 million to its $750 million floating rate debt portfolio. The bonds have averaged 3.7 percent for the first 10 months of 2001, resulting in at least $16 million of savings in interest costs 13,559 5,027 on an annual basis compared with fixed-rate debt. The TFA plans to issue $100 million of variable rate bonds in 2,040 each of its future financings during the plan period, increasing itSi adjustable-rate debt to $1.85 billion. It is expected 8,058 that by the end of 3004, TFA will exhaust its full bond capacity of $ 11.5 billion. 3,429 (909) The TFA Bond Anticipation Note (BAN) program, initiated in November 1999, continues to provide low- H,204 cost interim financing for the City. The 2001 Series 1 BANs issued in February ,2001 realized a true interest cost (TIC) of 3.1 percent, which was 10 basis points lower than the MIG-1 index. (The MIG-1 index is a short-term index for notes.) This was the most favorable spread achieved to date compared with an average 3 basis point ;8,540 spread in the previous TFA BAN issues. ' , /i 1,139 • ■ ’ i J \ 69 The City’s personal income tax revenues are projected to grow at an average of 1.9 percent between 2001 1,456 anfi 2005 despite the elimination of various surcharges and implementation of tax cuts. Recognizing the resilience 1,204 of the TFA revenues as well as its strong legal framework and credit structure, two rating agencies raised TFA’s inding rating in October 2000. S&P raised the rating from AA to AA+, Moodys from Aa3 to Aa2. Fitch maintains the rating at AA+.

New York City General Obligation Bonds and Cash Flow Financing. rhe size ts to ' With the TFA assuming $5 billion of the City’s new money financing needs and TS ASC taking up $ 1.8 billion, from the the NYC GO will handle the preponderance of the remaining financing requirement at $12 billion during the Financial Plan period through FY2005. The amount of annual GO financings will average about $1.9 billion for be water new money purposes during the plan period of 2001-2003. Beginning in FY2004, as the TFA approaches it^ taper. bonding limit and TSASC completes its bonding program, the City will increase its GO financing program to few York $2.5 billion and $4.2 billion in FY2004 and 2005, respectively. lai Currently the debt service for the City and its related financing entities (GO, MAC and lease debt) is 8.1 percent of the City’s total budgeted revenues in FY 2001.The ratio will rise to 9.6 percent in FY 2005. As a percentage of nmental !tax revenues^ the debt service ratio is 14.1 percent in FY 2001 and will increase to 15.8 percent in FY 2005. ' I-' i ’ . I Taking advantage of a lower interest rate environment, the City issued three GO refundings in this fiscal year, ^hority, . totaling $1.1 billion. The first refunding issued in October 2000, Series 2001 B&C, generated $22 million of net ' debt service savings by the end of 2003, with an equity contribution of $15 million in 2001. Similarly, the Series 2001 D&E issued in December 20Q0 utilized a $31 million cash contribution from the City to defease non-advance- refundable high-coupon debt and generated a net total budget savings of $30 million by the end of2002. On a present- ’ value basis, both financings achieved 5 percent debt service savings with overall TIC of 5.29 percent for Series B&C Nation and 4.91 perceiit for Series D&E. A,fter the issuance of the Series 2001 D&E bonds, the Federal Reserve lowered o2O% the Federal funds rate by 100 basis points in two separate actions before February. These moves created addition^ liable budget saving opportunity for the City through refinancing ofthose GO bonds previously left out for lack of economic benefits. In February 2001 the City took such opportunity and issued $697.5 million of refunding bonds, (Series 2001F&G) realizing $44 million of gross budget savings and over 5% of present value savings. jurce kage Electronic bidding, first implemented in April 1999 for NYC GO, has become the norm for both the GO and Sties. TEA’S competitive transactions. In October 2000, the City employed the same electronic bidding system for its

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NYC-WTC_000195602