NYC-WTC_000195490

NYC 9/11 Public Portal Document

Revenue Anticipation Notes (RANs) for the first time. A total of 28 bids were submitted through the Internet, in an amount of $4 billion. The 9-month note was sold with a TIC of 4.22 percent. The City will continue to utilize this technology for its bond and note financings where appropriate.)

The City has also increased its use of electronic media to communicate with its investors in the last year. The City, TEA, TSASC and NYW have all posted their preliminary official statements on the web. In addition, the I City made available an “electronic road-show” in conjunction with the provision of the preliminary official statement on a related Web site, password restricted for institutional investors only, during the sale of GO Scries 20piB&C. Marketing the City’s bonds through the “virtual” world which can be accessed by a greater number i of investors and viewed anytime and anywhere with a computer cpnnection, provides an additional service to institutional investors in City debt.

; Since theifirst conversion of $140 million of floating-rate bonds (VRDBs) into auction-based lloaling-rate sfecurities in April 1999, the City has continued to monitor their performance relative to other variable-rate bonds. *1 The all-in cost of the auction program, inclusive of credit enhancement and auction agent fees, has been nearly 10 basis points lower than traditionally remarketed variable-rate paper. In addition, the new product broadens the City’s investor base, reaching high-net-worth individuals. The City added $100 million of tax-exempt auction rate bpnds and implemented the first $100 million of taxable auction-rate bonds in its recent new money issue, the GO Series 2001H. These new series employ a modified auction procedure, allowing three broker-dealers to participate in the same auction bidding process. It is expected that the competition among the dealers will further I reduce the yields bn the auction-rate debt. i I In 2001 to date, short-term interest costs as reflected in the GO $2.9 billion of VRDBs have been 3.7 percent on average for tax-exempt debt and 6.4 percent for the taxable floating rate debt. These VRDBs, which have been ii traded on average at rates that are at least 150 basis points lower than those for the fixed-rale debt arc expected to generate an annual debt service savings of over $40 million.

I t The City’s seasonal borrowing has declined considerably in recent years. From a high of $3.65 billion of RANs and TANs issued in 1991, the City issued only $500 million of RANs in 1999 and $750 million of RANs in 2000 and 2001. The City currently projects issuance of $1.4 billion of RANs in 2002. I Lease Appropriation Debt ' I,

I On various occasions the City issues debt through a conduit to be repaid by a subject-to-appropriation lease obligation. This has been done through the New York State Housing Finance Agency, the New York State Urban I^evelopment Corporation, the New York City Educational Construction Fund and DASNY. The most visible ( recent projects the City has financed in this manner include Health and Hospitals Corporation projects under the Municipal Health Facilities program, and the City’s courts capital program.

' Since December 1993, DASNY has completed two bond issues for the City’s court capital program, totaling I $707 million. These bonds are supported by rental payments from the City, (which are subject to appropriation) and enhanced by a State aid intercept. The intercept is triggered if the City fails to make the rental payment to DASNY. The City plans to raise up to another $300 million of capital funds for courts through DASNY, utilizing r the same lease appropriation structure in late 2001. The total court facilities capital program is expected to amount I to about $2.3 billion over the next decade as shown tn the City’s Ten-Year Capital Strategy. J’'i While lease appropriation debt is generally rated at a notch below GO, on the strength of the State aid intercept, all three rating agencies (Moody’s, Fitch and S&P) rated the program at the same level as that of GO in DASNY’s 1999 financing for courts. Subsequent to the December 1999 financing, the City’s GO. ratings were increased in the fall of 2000 to A by S&P, A2 by Moody’s and A+ by Fitch. However, the court program did not receive a

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