NYC-WTC_000195490

NYC 9/11 Public Portal Document

Taking advantage of an improvement in interest rates, the Authority’s second issuance followed shortly thereafter on December 8, 2000, with an advance refunding of $60 million of FY 2000 Series B bonds. These FY 2001 Series B bonds were offered for sale with a par amount of $68.7 million and resulted in net present value savings of $3.9 million. The transaction structure included serial bonds from 2002 through 2020 and a single term bond maturing in 2031 . The term bond sold at a 5.41 percent yield, a very favorable 7 basis points over the MMD triple-A scale. The TIC cost of the issue was approximately 5.4 percent.

On December 141,2001 the Authority received a direct loan from EFG. EFC offered this $99.5 million bridge loan in anticipation of the restructuring of bond amortizations from 20 year's to 30 years — the longer amortizations which are now allowed in New York State by the United States Environmental Protection Agency (EPA). Proceeds from EFC bond sales assist in the financing of federally mandated clean' water and safe drinking water projects for municipalities like New York City. NYW used the direct loan proceeds to defease commercial paper previously issued to fund clean water improvements to the system. The subsidized interest cost of this direct loan was a very favorable 2.74 percent. Going forwafd, NYW expects to issue 30-year Second Resolution bonds to EFC with EFC issuing its 30-year bonds directly to the public. ' ■ ' :. ! ; I’ ! . 1

In the spring of 2001, the Authority expects to sell an additional $200 million of tax-exempt bonds as well as approximately $200 million of bonds to EFC. Additionally, the interest rate Environment may allbw for refunding opportunities during 2001 and 2002, resulting in net present value sayings on the Authority’s debt service. ' ' \

During the period of 2002 and2005, the Authority expects to sell an average of approximately $1.8 billion of new debt per year. Of this amount, NYW plans to issue a minimum of $300 million per year through EFC, taking advantage of the 33 to 50 percent interest rate subsidy available for qualifying projects, and minimizing the overall costs of its financing progrm,

TSASC,Inc.

TSASC, Inc., a special purpose corporation, was created by the City in November 1999 to issue bonds secured with the City's share of the Tobacco Settlement Revenues (TSRs) pursuant to a nationwide Master Settlement Agreement (MSA). TSASC issued the first of four series of Tobacco Flexible Amortization Bonds (Tobacco Bonds) in 1999 to finance a portion of the City’s capital program. Those bonds were the highest-rated bonds secured by TSRs issued to date by various other governmental entities. The pricing for the TSASC bonds with longer maturities also compares favorably to those in other tobacco transactions with comparable flexible-payment structulres or with super-sinker term structures. The only feature of subsequent tobacco bond financings which comp&ed well with !TSASC was traditional serial bonds in the early maturities.

TSASC postponed its second financing from April 2001 to April 2002 and will delay the third and fourth series of bonds to be issued by a year from the original schedule as well. In addition, TSASC is currently negotiating a $150 million federal government loan, which will be made to TSASC under the Transportation Infrastructure Financing and Innovation Act (TIFIA). This is being reflected as a $50 million reduction in net proceeds in each of thie remaining three financings. With additional reductions of bonded amounts otherwise required for liquidity reserves and capitalized interest, the size of the remaining three TSASC public bond issues will be approximately $630 million each. TSASC expects to complete the $150 million TIFIA loan agreement with the Federal Department of Transportation in the next few months. The loan will be secured with TSRs, on a parity with other TSASC senior program bonds, and will have an interest rate comparable to that borne by Treasury obligations. Proceeds from the TIFIA loan will be used to fund a portion of the reconstruction of Whitehall and St. George Ferry Tferminals and the purchase of three ferryboats.

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