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August 31, 2011

 

Comptroller DiNapoli Announces New York LGAC Bonds Awarded

Series 2011A Tax-Exempt New York Local Government Assistance Corporation Subordinate Lien Refunding Bonds: $184,040,000 Awarded


State Comptroller Thomas P. DiNapoli today announced the award, through a competitive sale, of $184,040,000 of New York Local Government Assistance Corporation (LGAC) Series 2011A Subordinate Lien Refunding Bonds to Bank of America Merrill Lynch. The true interest cost of the winning bid was 1.654503 percent.

The true interest cost of the other bids submitted are as follows: J.P. Morgan Securities LLC (1.675433 percent), Wells Fargo Bank, National Association (1.680007 percent), Citigroup Global Markets (1.6900067 percent), Barclays Capital, Inc. (1.700699 percent), Goldman, Sachs & Co. (1.702304 percent), Morgan Stanley & Co Inc (1.707447 percent) and Jefferies & Company, Inc. (1.774298 percent). All bids were received via IPREO's BiDCOMP/PARITY competitive bidding system, BiDCOMP.

The net proceeds of the Series 2011A Subordinate Lien Refunding Bonds will be used to redeem $188,705,000 in previously issued senior lien variable interest rate bonds and, along with other funds, terminate interest rate exchange agreements associated with the refunded bonds. The bonds will mature on each April 1 beginning on April 1, 2012 and ending on April 1, 2021. The bonds are expected to be delivered on September 15, 2011.

Refunding the variable rate bonds with fixed rate bonds allows LGAC to take advantage of the low interest rate environment, demand for highly rated municipal debt and reduce its exposure to interest rate risk, liquidity renewal risk and support cost increases.

The 2011A Subordinate Lien Refunding Bonds will be general obligations of LGAC, payable from payments LGAC receives from the State. The State's payments to the LGAC are derived from a portion of the revenues collected from certain sales and compensating use taxes imposed by the State on a statewide basis.

Under the Public Authorities Law, LGAC is required to enter into an agreement with the New York State Comptroller for the sale of all LGAC bonds and notes. Comptroller DiNapoli serves as LGAC's "Exclusive Agent" for these sales.

Additional information about the New York Local Government Assistance Corporation can be found at: http://www.osc.state.ny.us/pension/debtlgac.htm.



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